---
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.
No comments:
Post a Comment