PA Agreement of Sale Part 9
The three paragraphs that start this page are all important to understand as they impact the agreement, its breach and any damages the seller can recoup.
Paragraph 28 deals with Representations. How I usually sum sub-paragraph A up is that everything needs to be written down and signed by everyone that they agree with what is written down. Don't accept anyone's word, the seller, the buyer or either of the agents in the transaction, any brochures or promotional material or even advertising. Only what is in this agreement or made part of it is a part of the agreement. Sub-paragraph B is a statement that unless stated elsewhere in the agreement Buyer has inspected the property or has waived the right to do so and agrees to purchase it in its present condition, That is why it is important to make sure you select your inspection contingencies throughout the agreement and not forget to mark one and by missing it have accepted the present condition relating to that inspection contingency. It also acknowledges that Brokers etc have not made an independent examination or determination of the soundness of the property, permitted uses nor have they made a mechanical inspection of any of the systems at the property. Sub-paragraph C is a statement that all repairs required by the agreement will be completed in a workmanlike manner. Sub-paragraph D is a notification that Brokers may offer services to assist un-represented parties in complying with this agreement.
Paragraph 29 deals with Default. If the buyer defaults this paragraph deals with the options open to the seller. Seller has the option of retaining all sums paid by the buyer, including deposit monies if the buyer fails to make any additional payments as specified in paragraph 3 or gives false or incomplete information to the seller, brokers, or any party identified in the Agreement concerning the buyer's financial or legal status or the buyer violates or fails to fulfill any other terms of this Agreement. Unless sub paragraph C is marked seller may retain the sums paid by the buyer including the deposit monies on account of purchase price or as monies applied to seller's damages or as liquidated damages for such breach. Sub-paragraph C IS VERY IMPORTANT that is why they print it in capitals and bold it. Simply put as a buyer the box here needs to be marked. It limits the seller to retaining any sums paid by you including deposit monies as liquidated damages. The final sub-paragraph here D states that if the seller retains all sums paid by the buyer, including the deposit monies as liquidated damages pursuant to what was stated in B and C above buyer and seller are released from further obligation or liability and the agreement is VOID.
Paragraph 30 handles Termination and Return of Deposits. As noted this paragraph is referenced throughout the agreement when ever the agreement is terminated by the buyer and the parties are in agreement that it should end and also what happens if they are not in agreement. It handles who gets what. Sub-paragraph A deal with the buyer terminating the agreement where he has a right to by the agreement, all deposit monies paid are returned to the buyer and the Agreement is VOID. The broker holding the deposit may only release the deposit monies according to the terms of a fully executed agreement between buyer and seller and as allowed by the Rules and Regulations of the State Real Estate Commission. If there is a dispute over who gets the deposit monies sub-paragraph B states a broker is not allowed to decide if there was a breach or which party is entitled to the money. The deposit monies are held in escrow until the dispute is resolved. In the case where it goes to litigation the broker will distribute the deposit monies according to the final order from the court or a written agreement between the parties. Both buyer and seller agree if any broker and licensee is joined in litigation regarding deposit monies, the attorneys fees and costs will be paid by the party joining them.
Paragraph 31 is my favorite paragraph as it explains about the Real Estate Recovery Fund. A phone number is given here and the paragraph is a statement about how if you litigate against a licensee or broker and win your case but cannot get your settlement, after exhausting all legal and equitable remedies, the Fund will pay you out. What happens is that they then stop the licensee from working till that judgment is paid with interest. The phone number of the fund is (800) 822-2113.
Paragraph 32 handles Mediation. Unless Mediation is waived in this paragraph buyer and seller agree to submit to mediation in the case of a dispute or claim arising out of the agreement. Any agreement reached through mediation is binding. The agreement of sale contains Rules and Procedures of the Home Sellers/Home Buyers Dispute Resolution System. Any agreement to mediate disputes or claims arising from the agreement survives settlement. Whilst you can waive mediation it does not stop you later deciding to choose mediation.
Paragraph 33 is a Lead Paint Hazard Reduction Act Notice. This is required for all properties built before 1978. Basically any property built before 1978 was probably painted with paint containing lead. Although it may have been painted over by now, should you sand or do rehab work you may release lead particles into the air. You need to be aware of this and you may elect to test for lead if you feel strongly about this. There is an additional addendum if the property is built before 1978 that deals with and handles this situation. The buyer also indicates they have received the booklet Protect your family from lead in your home and whether the addendum mentioned is part of the agreement. That addendum is very similar to the contingencies mentioned under the home inspection with similar choices for buyers and sellers as mentioned previously
This brings us to the final page of the agreement where any specific addendums or paperwork, such as the MLS sheet, Seller's Disclosure may be made part of the agreement. Any special clauses are also added, such as the home needing to appraise for the purchase price.
In the middle of the page is a notice to the parties to the Agreement that once signed this becomes a binding contract. If you have questions consult an attorney before signing.
It also states that return by fax of this agreement and any addenda or amendments signed by all parties mean acceptance by the parties.
That completes the explanation of the PA Agreement of Sale