Utah's New REPC Section 7. Seller Disclosures

Utah's New REPC Section 7. Seller Disclosures



This update adds a couple of sentences, plus makes an electronic version of Seller Disclosures permissible.







Old REPC ----------------------------------------------------------------- :

7. SELLER DISCLOSURES. No later than the Seller Disclosure Deadline referenced in Section 24(b), Seller shall provide to Buyer the following documents which are collectively referred to as the "Seller Disclosures":


(a) a Seller property condition disclosure for the Property, signed and dated by Seller;
(b) a commitment for the policy of title insurance;
(c) a copy of any leases affecting the Property not expiring prior to Closing;
(d) written notice of any claims and/or conditions known to Seller relating to environmental problems and building or zoning code violations; and
(e) Other (specify) ___




New REPC ----------------------------------------------------------------- :

7. SELLER DISCLOSURES. No later than the Seller Disclosure Deadline referenced in Section 24(a), Seller shall provide to Buyer the following documents in hard copy or electronic format which are collectively referred to as the "Seller Disclosures":


(a) a written Seller property condition disclosure for the Property, completed, signed and dated by Seller as provided in Section10.3;
(b) a Commitment for Title Insurance as referenced in Section 6;
(c) a copy of any restrictive covenants (CC&R’s), rules and regulations affecting the Property;
(d) a copy of the most recent minutes, budget and financial statement for the homeowners’ association, if any;
(e) a copy of any lease, rental, and property management agreements affecting the Property not expiring prior to Closing;
(f) evidence of any water rights and/or water shares referenced in Section 1.4;
(g) written notice of any claims and/or conditions known to Seller relating to environmental problems and building or zoning code violations; and
(h) Other (specify) ___




Discussion.

A few of the sentences have been re-ordered and the indication of "written" disclosures is now in the new REPC.




Below are excerpts of the actual forms.
Hold down your [Ctrl] control key and click on the image and it will open fully in a new browser window.



Old REPC Section 7:







New REPC. Section 7:






--------- *** ---------- I’m remarking on the new REPC changes as I see them. This isn't legal advice.





Next up ...Section 8. Buyer's Condition of Purchase



From My Porch



Mike B. Class Star®




ClassStar® offers two, 3-hour core courses. Your business and referrals are appreciated.

The Porch weblog and all contents herein are © 2008 Mike Ballif. All rights reserved.

Utah's New REPC Section 6. Title and Title Insurance

Utah's New REPC Section 6. Title and Title Insurance

This update provides clarification and notification of title insurance policy types. Also in this update the State has gathered up the sections on title issues and moved them all to Section 6.


The Old REPC's section 10.1 has been moved to the New REPC Section 6:



Old REPC ----------------------------------------------------------------- :

10. SELLER WARRANTIES & REPRESENTATIONS.

10.1 Condition of Title. Seller represents that Seller has fee title to the Property and will convey good and marketable title to Buyer at Closing by general warranty deed. Buyer agrees, however, to accept title to the Property subject to the following matters of record: easements, deed restrictions, CC&R’s (meaning covenants, conditions and restrictions), and rights-of-way; and subject to the contents of the Commitment for Title Insurance as agreed to by Buyer under Section 8. Buyer also agrees to take the Property subject to existing leases affecting the Property and not expiring prior to Closing. Buyer agrees to be responsible for taxes, assessments, homeowners association dues, utilities, and other services provided to the Property after Closing. Except for any loan(s) specifically assumed by Buyer under Section 2.1(c), Seller will cause to be paid off by Closing all mortgages, trust deeds, judgments, mechanic's liens, tax liens and warrants. Seller will cause to be paid current by Closing all assessments and homeowners association dues.



New REPC ----------------------------------------------------------------- :

6. TITLE & TITLE INSURANCE.

6.1 Title to Property. Seller represents that Seller has fee title to the Property and will convey marketable title to the Property to Buyer at Closing by general warranty deed. Buyer does agree to accept title to the Property subject to the contents of the Commitment for Title Insurance (the “Commitment”) provided by Seller under Section 7, and as reviewed and approved by Buyer under Section 8. Buyer also agrees to accept title to the Property subject to any existing leases, rental and property management agreements affecting the Property not expiring prior to Closing which were provided to Buyer pursuant to Section 7(e). The provisions of this Section 6.1 shall survive Closing.



Further; Section 6.2 has been added to the New REPC:

6.2 Title Insurance. At Settlement, Seller agrees to pay for and cause to be issued in favor of Buyer, through the title insurance agency that issued the Commitment (the “Issuing Agent”), the most current version of the ALTA Homeowner’s Policy of Title Insurance (the “Homeowner’s Policy”). If the Homeowner’s Policy is not available through the Issuing Agent, Buyer and Seller further agree as follows: (a) Seller agrees to pay for the Homeowner’s Policy if available through any other title insurance agency selected by Buyer; (b) if the Homeowner’s Policy is not available either through the Issuing Agent or any other title insurance agency, then Seller agrees to pay for, and Buyer agrees to accept, the most current available version of an ALTA Owner’s Policy of Title Insurance (“Standard Coverage Owner’s Policy”) available through the Issuing Agent.



Discussion.

The title insurance policy referred to in the New REPC is the ALTA Homeowner's Policy. This policy provides coverage greater than the former ALTA Owners Policy.

The increased coverage premium is 10% more than the ALTA Owners Policy -- the Standard Coverage Policy in the old REPC, but offers protections for losses such as un-marketability of title, document recording failures (mortgages, liens, easements, and taxes and bankruptcies), unrecorded easements, mechanics liens, and incorrect surveys or survey problems.


'Amazing expanded protections for a hundred or so dollars. And this is one of the reasons the REPC was adjusted...to draw attention to the availability of the "better" policy for a very small increase in premium.



The verbiage in 6.2 provides for the ALTA Homeowners Policy to be the default choice...and to also allows the Buyer to request this expanded coverage if the initial insurance brought into the transaction by the title insurance company doesn't offer the expanded coverage policy. Further there is verbiage to handle cases where this expanded coverage ALTA Homeowners Policy is not available at all.



Below are excerpts of the actual forms.



Hold down your [Ctrl] control key and click on the image and it will open fully in a new browser window:


Old REPC Section 10.1





Old REPC Section 6.







New REPC. Section 6








--------- *** ---------- I’m remarking on the new REPC changes as I see them. This isn't legal advice.






Next up ...Section 7. Seller Disclosure




From My Porch

Mike B. Class Star®

ClassStar® offers two, 3-hour core courses. Your business and referrals are appreciated.

The Porch weblog and all contents herein are © 2008 Mike Ballif. All rights reserved.

Utah's New REPC Section 5. Confirmation of Agency Disclosure

REPC Section 5. Confirmation of Agency Disclosure

This update seems to have a streamlining and clarification effect.

The initials boxes used in the old REPC are gone. The many times I've used these boxes...and also had my office manager kick the REPC back to me when they were overlooked... always seemed to be a bit of overkill.

I suppose the original intent was to further draw everyone's attention to the agency relationships...not to mention another separate and complete form that spelled out agency relationships.
So, the initials boxes are gone.

Another change is Listing Agent has been replaced with Seller's Agent. Selling Agent has been replaced with Buyer's Agent:

The Listing Agent is now Seller's Agent

The Selling Agent is now Buyer's Agent

... and further...

The Listing Broker is now Seller's Brokerage

The Selling Broker is now Buyer's Brokerage

That feels better, I think...

Here is the before and after:

Old REPC Section 5 Confirmation of Agency Disclosure text:

5. CONFIRMATION OF AGENCY DISCLOSURE . At the signing of this Contract:

[ ] Seller's Initials [ ] Buyer's Initials

The Listing Agent,_____ , represents [ ] Seller [ ] Buyer [ ] both Buyer and Seller as a Limited Agent;

The Listing Broker_____, represents [ ] Seller [ ] Buyer [ ] both Buyer and Seller as a Limited Agent;

The Selling Agent, _____, represents [ ] Seller [ ] Buyer [ ] both Buyer and Seller as a Limited Agent;

The Selling Broker,_____,represents [ ] Seller [ ] Buyer [ ] both Buyer and Seller as a Limited Agent;

Here's the actual old REPC form:

Hold down your [Ctrl] control key and click on the image to open in full size in a new browser window.

New REPC Section 5 Confirmation of Agency Disclosure text:

5. CONFIRMATION OF AGENCY DISCLOSURE. Buyer and Seller acknowledge prior written receipt of agency disclosure provided by their respective agent that has disclosed the agency relationships confirmed below. At the signing of the REPC:

Seller’s Agent________ , represents [ ] Seller [ ] both Buyer and Seller as a Limited Agent;

Seller’s Brokerage_____ , represents [ ] Seller [ ] both Buyer and Seller as a Limited Agent;

Buyer’s Agent________ , represents [ ] Buyer [ ] both Buyer and Seller as a Limited Agent;

Buyer’s Brokerage_____, represents [ ] Buyer [ ] both Buyer and Seller as a Limited Agent.

Here's the actual new REPC form:

Hold down your control [Ctrl] key and click on the image to open in full size in a new browser window.

Good changes, I think... Very good.

*** I’m remarking on the new REPC changes as I see them. This isn't legal advice. ***

Next up ... Section 6. Title and Title Insurance.

From My Porch

Mike B. Class Star®

ClassStar® offers two, 3-hour core courses. Your business and referrals are appreciated.

The Porch weblog and all contents herein are © 2008 Mike Ballif. All rights reserved.

Utah's New REPC Section 4. Possession

Utah's New REPC Section 4. Possession

Section 4. Possession re-write has some good updates:

The "Other" provision in the old REPC has been removed.

Here 's the old REPC Section 4 text:


4. POSSESSION. Seller shall deliver physical possession to Buyer within: [ ] hours [ ] days after Closing; [ ] Other (specify)_____________________________


That's it ...one sentence ...

--------- *** ----------

Here's the new REPC Section 4 text:

4. POSSESSION. Seller shall deliver physical possession of the Property to Buyer as follows: [ ] Upon Closing; [ ] ___Hours after Closing; [ ] Calendar Days after Closing. Any contracted rental of the Property prior to or after Closing, between Buyer and Seller, shall be by separate written agreement. Seller and Buyer shall each be responsible for any insurance coverage each party deems necessary for the Property including any personal property and belongings. Seller agrees to deliver the Property to Buyer in broom-clean condition and free of debris and personal belongings. Any Seller or tenant moving-related damage to the Property shall be repaired at Seller's expense. The provisions of this Section shall survive Closing.

...and the new REPC form itself:

Hold down your control key and click on the image to open it full size.

New Section 4. Possession discussion ...

Buyer and seller agree in this new REPC section to the date of physical possession--a key date and agreement when the title insurance and loan companies are allowed four calendar days to record the transaction.

The seller additionally agrees in this section to deliver the property free of personal property and be broom swept--free of debris.

One of the key effects of these changes is to avoid the infamous ... buyers move in--do repairs/updates over the weekend (before the transaction actually closes and records, only to find out there's a problem and the transaction changes or fails.

--------- *** ---------- I’m remarking on the new REPC changes as I see them. This isn't legal advice.

Next up .... Section 5. Confirmation of Agency Disclosure

From My Porch

Mike B. Class Star®

ClassStar® offers two, 3-hour core courses. Your business and referrals are appreciated.

The Porch weblog and all contents herein are © 2008 Mike Ballif. All rights reserved.

Utah’s New REPC Section 3. Settlement And Closing

Utah’s New REPC Section 3. Settlement And Closing


---


Section 3.1 Settlement


The Old REPC has one big paragraph entitled Settlement and Closing that deals with settlement, prorations, tenant deposits, closing, and several other items.

Here's the text from Old REPC Sec. 3.0:

3. SETTLEMENT AND CLOSING.

Settlement shall take place on the Settlement Deadline referenced in Section 24(f), or on a date upon which Buyer and Seller agree in writing. “Settlement" shall occur only when all of the following have been completed: (a) Buyer and Seller have signed and delivered to each other or to the escrow/closing office all documents required by this Contract, by the Lender, by written escrow instructions or by applicable law; (b) any monies required to be paid by Buyer under these documents (except for the proceeds of any new loan) have been delivered by Buyer to Seller or to the escrow/closing office in the form of collected or cleared funds; and (c) any monies required to be paid by Seller under these documents have been delivered by Seller to Buyer or to the escrow/closing office in the form of collected or cleared funds. Seller and Buyer shall each pay one-half (½) of the fee charged by the escrow/closing office for its services in the settlement/closing process. Taxes and assessments for the current year, rents, and interest on assumed obligations shall be prorated at Settlement as set forth in this Section. Tenant deposits (including, but not limited to, security deposits, cleaning deposits and prepaid rents) shall be paid or credited by Seller to Buyer at Settlement. Prorations set forth in this Section shall be made as of the Settlement Deadline date referenced in Section 24(f), unless otherwise agreed to in writing by the parties. Such writing could include the settlement statement. The transaction will be considered closed when Settlement has been completed, and when all of the following have been completed: (i) the proceeds of any new loan have been delivered by the Lender to Seller or to the escrow/closing office; and (ii) the applicable Closing documents have been recorded in the office of the county recorder. The actions described in parts (i) and (ii) of the preceding sentence shall be completed within four calendar days of Settlement.



Mercy. It's amazing we can even read it. One huge paragraph. And it was pre-printed in sans-serif typeface.




Some day the state will figure it out and use a serif typeface so that these forms are more legible, easy to read and understand, thereby reducing errors.


Here's the actual form:



Hold down your control key, and click on the image to open another browser window containing a larger view of this image.


***


The State changed Section 3 Settlement And Closing to deal with each of these items in its own section, and now the new REPC has:

Sec. 3.1 Settlement
Sec. 3.2 Prorations
Sec. 3.3 Special Assessments,
Sec. 3.4 Fees/Costs/Payment Obligations
and Sec 3.5 Closing.




Here is new Section 3 Settlement And Closing


Here's the actual form:



Hold down your control key, and click on the image to open another browser window containing a larger view of this image.


Discussion ....

Section 3.1 is a paragraph on Settlement. Note that Utah Code defines collected or cleared funds, but there were problems in some instances about the definition of cleared funds and the fact that a cashier’s check is not considered cleared or collected funds unless they have been held overnight, etc.

This change in the REPC section is meant to clear up what collected or cleared funds mean in the transaction and what is acceptable for settlement.


Actual Text:

3. SETTLEMENT AND CLOSING.

3.1 Settlement. Settlement shall take place no later than the Settlement Deadline referenced in Section 24(d), or as otherwise mutually agreed by Buyer and Seller in writing. “Settlement" shall occur only when all of the following have been completed: (a) Buyer and Seller have signed and delivered to each other or to the escrow/closing office all documents required by the REPC, by the Lender, by the title insurance and escrow/closing offices, by written escrow instructions (including any split closing instructions, if applicable), or by applicable law; (b) any monies required to be paid by Buyer or Seller under these documents (except for the proceeds of any new loan) have been delivered by Buyer or Seller to the other party, or to the escrow/closing office, in the form of cash, wire transfer, cashier’s check, or other form acceptable to the escrow/closing office.





3.2 Prorations. Prorations has its own section in the REPC and the items generally prorated in a transaction are mentioned in the pre-printed form.


3.2 Prorations. All prorations, including, but not limited to, homeowner’s association dues, property taxes for the current year, rents, and interest on assumed obligations, if any, shall be made as of the Settlement Deadline referenced in Section 24(d), unless otherwise agreed to in writing by the parties. Such writing could include the settlement statement. The provisions of this Section 3.2 shall survive Closing.





3.3 This is a new section in the REPC. Special Assessments are addressed and negotiated in this section. Many times a homeowners association will levy an assessment upon each property in the project to perhaps upgrade the sprinkler system, or repair roads and sidewalks. This section is to enter these assessments if any and to indicate what party has to pay for them.


3.3 Special Assessments. Any assessments for capital improvements as approved by the HOA (pursuant to HOA governing documents) or as assessed by a municipality or special improvement district, prior to the Settlement Deadline shall be paid for by: [ ] Seller [ ] Buyer [ ] Split Equally Between Buyer and Seller [ ] Other (explain) _ ____ _____ __. The provisions of this Section 3.3 shall survive Closing.





Sec. 3.4 Fees/Costs/Payment Obligations. Transfer fees imposed upon the sale and transfer of a property are used in some land developments. It generally is a percentage of the purchase price, and this fee is addressed and treated in the section to be paid by the Buyer. The pre-printed contract says the Buyer will pay the transfer fee. It can be negotiated.



3.4 Fees/Costs/Payment Obligations. Unless otherwise agreed to in writing, Seller and Buyer shall each pay one-half (1/2) of the fee charged by the escrow/closing office for its services in the settlement/closing process. Tenant deposits (including, but not limited to, security deposits, cleaning deposits and prepaid rents) shall be paid or credited by Seller to Buyer at Settlement. Buyer agrees to be responsible for homeowners’ association and private and public utility service transfer fees, if any, and all utilities and other services provided to the Property after the Settlement Deadline. The escrow/closing office is authorized and directed to withhold from Seller’s proceeds at Closing, sufficient funds to pay off on Seller’s behalf all mortgages, trust deeds, judgments, mechanic's liens, tax liens and warrants. The provisions of this Section 3.4 shall survive Closing.





3.5 Closing. The definition of what "Closing means has been indicated separately from Settlement in Section 3.1. The change promotes clarity between Closing and Settlement.


3.5 Closing. For purposes of the REPC, “Closing” means that: (a) Settlement has been completed; (b) the proceeds of any new loan have been delivered by the Lender to Seller or to the escrow/closing office; and (c) the applicable Closing documents have been recorded in the office of the county recorder. The actions described in 3.5 (b) and (c) shall be completed within four calendar days after Settlement.




Next up: Section 4. Possession

---



The forgoing isn't legal advice. I’m remarking on the new REPC changes as I see them.



From My Porch







Mike B. Class Star^®





ClassStar^®.com offers two, 3-hour core courses. Your business and referrals are appreciated.

The Porch weblog and all contents herein are © 2008 Mike Ballif. All rights reserved.

Utah’s New REPC Section 2.0. Purchase Price.

Section 2.0. Purchase Price.

Section 2. Purchase Price has been streamlined and simplified, with a sometimes-misused section removed.

In the new REPC, note the last sentence (a new one) of the first paragraph stating "Any amounts shown in 2(b) and 2(d) may be adjusted as deemed necessary by Buyer and the Lender."

This change allows for the actual loan amounts to be adjusted in an Addendum to what actually occurs in the lending process. Specific loan terms are spelled out in the indicated Addenda.

Also note Section 2(e) ________ Other has been dropped from the new REPC. The discussions on this provision indicated the provision had become troublesome and many times used for matters other than financing.



Here are the actual sections .....


Old Section 2. Purchase Price







2. PURCHASE PRICE. The Purchase Price for the Property is $ ___________.
2.1 Method of Payment. The Purchase Price will be paid as follows:

$ __________ (a) Earnest Money Deposit. Under certain conditions described in this Contract, THIS DEPOSIT MAY BECOME TOTALLY NON-REFUNDABLE.

$ __________ (b) New Loan. Buyer agrees to apply for a new loan as provided in Section
2.3. Buyer will apply for one or more of the following loans: [ ] CONVENTIONAL [ ] FHA [ ] VA [ ] OTHER (specify) ___________________ If an FHA/VA loan applies, see attached FHA/VA Loan Addendum. If the loan is to include any particular terms, then check below and give details: [ ] SPECIFIC LOAN TERMS ____________________________ .

$ ___________ (c) Loan Assumption Addendum (See attached Assumption Addendum if applicable)

$____________ (d) Seller Financing (see attached Seller Financing Addendum if applicable)

$____________ (e) Other (specify)

$____________ (f) Balance of Purchase Price in Cash at Settlement

$ ____________ PURCHASE PRICE. Total of lines (a) through (f)




------------------------------------------------------------------------------------------



New Section 2. Purchase Price






2. PURCHASE PRICE. The Purchase Price for the Property is $ _____________. Except as provided in this Section, the Purchase Price shall be paid as provided in Sections 2(a) through 2(d) below. Any amounts shown in 2(b) and 2(d) may be adjusted as deemed necessary by Buyer and the Lender.

$ ________________ (a) Earnest Money Deposit. Under certain conditions described in the REPC, this deposit may become totally non refundable.

$ ________________ (b) New Loan. Buyer may apply for mortgage loan financing (the “Loan”) on terms acceptable to Buyer: If an FHA/VA loan applies, see attached FHA/VA Loan Addendum.

$________________ (c) Seller Financing (see attached Seller Financing Addendum)

$________________ (d) Balance of Purchase Price in Cash at Settlement

$________________ PURCHASE PRICE. Total of lines (a) through (d)





------------------------------------------------------------------------------------------



UP Next: Section 3.1 Settlement



From My Porch

Mike B. Class Star^®

ClassStar offers two, 3-hour core courses. Your business and referrals are appreciated.

I’m remarking on the new REPC changes as I see them. The forgoing isn't legal advice.

The Porch weblog and all contents herein are © 2008 Mike Ballif. All rights reserved.

Utah’s New REPC Section 1.2, 1.3, 1.4.

Utah’s New REPC Section 1.2, 1.3, 1.4. re; Personal Property and Water.

These sections are about included property and water rights that are involved in the transaction. The current / old REPC Section 1.3 is identical in the new REPC, but re-numbered Section 1.4.

These are the actual clauses contained in each form:

Current / Old REPC:

1.2 Excluded Items. The following items are excluded from this sale: ____________________

1.3 Water Rights. The following water rights are included in this sale:________________

There is no Section 1.4 in the Current / Old REPC.

New REPC:

1.2 Other Included Items. The following items that are presently owned and in place on the Property have been left for the convenience of the parties and are also included in this sale (check applicable box): [ ] washers [ ] dryers [ ] refrigerators [ ] water softeners [ ] microwave ovens [ ] other (specify)_____________________The above checked items shall be conveyed to Buyer under separate bill of sale with warranties as to title.

1.3 Excluded Items. The following items are excluded from this sale: _____________________________________

1.4 Water Service. The Purchase Price for the Property shall include all water rights/water shares, if any, that are the legal source for Seller’s current culinary water service and irrigation water service, if any, to the Property. The water rights/water shares will be conveyed or otherwise transferred to Buyer at Closing by applicable deed or legal instruments. The following water rights/water shares, if applicable, are specifically excluded from this sale: ________________________

--

Discussion:*

The new section 1.2 delineates personal property that the Commission and others have noted as problem areas or items in past transactions, and this rewrite looks to minimize or avoid disagreements later in the transaction by providing more specificity.

The new section 1.3 is the same as the old Section 1.2 and provides a place to exclude items from the transaction.

In the new Section 1.4, notice the blank line that was formerly available in the old Section 1.3 about water rights has been removed. This new section reflects most residential transactions with regard to water shares and water rights.

------

*I’m remarking on the new REPC changes as I see them. I’m not offering legal advice.

Up next…Section 2: Purchase Price.

From My Porch

Mike B. Class Star^®

ClassStar offers two, 3-hour core courses. Your business and referrals are appreciated.

The Porch weblog and all contents herein are © 2008 Mike Ballif. All rights reserved.