There’s nothing “standard” about it. Part 1
Richard D. Vetstein, is back with some notes for buyers about the Purchase and Sales Agreement:
In Massachusetts, the purchase and sale agreement (known as the “P&S”) most often used is the so-called “standard” form agreement supplied by the Greater Boston Real Estate Board or one modeled very closely to this form. The “standard” form P&S is, however, far from standard, and should be modified by way of an attached “rider” to address some very critical issues arising in most every transaction.From a buyer’s perspective, there are two major problems with the “standard” form P&S:
1. It significantly favors the seller, and
2. It doesn’t adequately address such important issues as seller repairs, septic system/Title V compliance, radon gas, lead paint, buyers’ access to the property while it is under agreement, to name a few.I’ll outline a few common issues not addressed adequately in the “standard” form, saving others for a later post.
Septic Systems/Title V
If the home is serviced by a septic system, Title V requires the inspection of the system within 2 years of the sale of the home. Failed septic systems can cost many thousands of dollars to repair or replace. The standard form P&S should be modified to provided an “out” if the septic system fails inspection, or give the buyers the option to close if the seller can repair the septic system during an agreed upon time period, provided that the buyer do not lose their mortgage rate lock.
Radon Gas is a naturally occurring radioactive gas released from the ground which can cause lung cancer. Radon testing should be performed by buyers during the home inspection process. Elevated levels of radon (above 4.0 pCi/l) can be treated through radon remediation systems. The purchase and sale agreement should be modified to provide for a radon testing contingency and the buyers’ ability to terminate the agreement if elevated radon levels are found, and/or the option of having the sellers pay for a radon remediation system.Lead Paint
Because the abatement of lead paint can be costly, buyers typically look for a right to terminate the P&S if lead paint exists and the abatement/removal of it exceeds a certain dollar threshold.Access
Oftentimes overlooked, but a cause of friction, is buyers’ ability to access the house prior to the closing. To avoid such friction, an access clause should be added to the P&S giving the buyer reasonable access at reasonable times with advance notice to the sellers.You should always consult a qualified real estate attorney to help you draft the ideal Massachusetts “standard” purchase and sale agreement.
I asked Attorney Vetstein to stop here, because the editors want us to keep the entries short. He'll be back with more on the P & S. What questions do you have about this important contract? What problems did you have that you wish your attorney had prevented?
