A Review of the GCAAR Regional Contract – Part 2 of 3

In the last newsletter, we reviewed in detail the first ten paragraphs of the

Regional Sales Contract. This article continues with a discussion beginning with
Paragraph 11 titled, “Financing Application”. This provision requires the purchaser to
make written application for financing within 7 days after the date of ratification of the
contract. Also, it requires the purchaser to make application for insurance during that
time frame.

Paragraph 12 allows the purchaser to seek alternate financing from that originally
provided in the Contract, as long as settlement is not delayed and there is no additional
cost to the seller. In Paragraph 13, purchasers acknowledge whether they will owner
occupy the property, and that the transaction is not contingent on the sale or lease of
other real estate.

The Termite Inspection provision of the Regional Sales Contract (Paragraph 14)
has been simplified, although its simplicity can create some extreme results. It gives
the option to choose whether the Buyer or Seller pays to obtain the report, which is to
be dated less than thirty (30) days prior to settlement. However, in providing that the
Seller is responsible to pay for all extermination and structural repairs identified in the
report, there is NO LIMITATION on the costs to the Seller. The MAR Contract, for
example, limits the Seller’s possible expenses to two percent (2%) of the sales price of
the Property. It is not inconceivable to have the Seller be obligated to exterminate and/or
rebuild an entire room or garage if this provision is not modified or limited.

Paragraph 15 provides that the risk of loss remains with the seller until execution
and delivery of the deed at closing. The following paragraph provides for the delivery of
title to purchaser which title is to be “good and marketable”.

Pursuant to Paragraph 17, the seller is required to deliver possession of the
property to the purchaser on the date of closing. The next paragraph provides for the
payment of fees by the respective parties for services rendered to them.

Paragraph 20 provides for the adjustment and proration of certain charges
against the property such as taxes and water and sewer charges. However, any oils or
fuel remaining in the respective tanks become the property of the purchaser without

adjustment or proration.

The parties agree in Paragraph 21 that in the event of a dispute between the
parties which results in legal action, the prevailing party may be entitled to recover
attorney fees from the defaulting party, if required by the court. In the event of a default
by purchaser (Paragraph 23), the seller may elect to either forfeit the deposit as fixed
and liquidated damages, or to sue the purchaser for specific performance and damages.
Conversely, the purchaser could sue the seller for specific performance or monetary
damages in the event of a default by the seller. Again, it clarifies that if there is legal
action taken, the defaulting party may be required to pay the attorney fees of the non-
defaulting party.

The final article in this series will conclude the discussion of the newly revised
Regional Sales Contract.