Summary of Form Revisions - October, 2007

Form #100 - Financing Notices

Prior to the GCAAR version of this form for use in Maryland and DC, there was no form for the seller to notify the buyer that his financing contingency had expired. Because the Regional Contract particularly specifies Form 100 as the required form to release the financing contingency, we could not change the form number. In an effort to consolidate the seller's notice and buyer's notice regarding financing contingency on the same form, we added a paragraph to the current Form 100. This saved creating a separate form to address the mechanism for a seller to "call the question" on financing.

Form #910 - Listing AgreementForm 1341 Buyer Agency Agreement 

There were two changes made to these forms:

  1. The first part of the second sentence was removed ("Settlement is a condition precedent to Seller's obligation to pay the Broker's fee..."). It was felt to be unnecessary since the initial sentence states that the payment is due at settlement. Also, in some cases, settlement may not be a condition precedent to the Seller's obligation to pay the fee; i.e., default on the part of the seller as one example.

  2. We added the phrase "to which the Broker is not a party" after "...executes a release" and before "of the sales contract..." to address the situation where a seller and buyer agree on their own to release each other from the contract for whatever reason. In such a situation, we wanted to be clear that if the Broker is not a party to that release, then the Broker's Fee may still be due and payable to the Broker despite the fact that a release has been executed by the seller and buyer.

Form #910 - Listing Agreement

New Language:

6C. Payment of Broker's Fee: Payment of Broker's fee is due at Settlement, unless Seller, after contract acceptance, fails to perform or is otherwise in default of the sales contract, or executes a release to which the Broker is not a party of the sales contract after all contingencies thereunder have been removed. In such case, the Broker's entire fee is due no later than the agreed settlement date.

Old Language:

6C. Payment of Broker's Fee: Payment of Broker's fee is due at Settlement. Settlement is a condition precedent to Seller's obligation to pay the Broker's Fee unless Seller, after contract acceptance, fails to perform or is otherwise in default of the sales contract. In such case, the Broker's entire fee is due no later than the agreed settlement date.

Form #1341 - Buyer Agency Agreement

New Language:

7E. Payment of Broker's Fee: Payment of Broker's Fee is due at Settlement, unless Buyer, after contract acceptance, fails to perform or is otherwise in default of the sales contract or executes a release to which the Broker is not a party of the sales contract after all contingencies thereunder have been removed. In such case, the Broker's entire fee is due no later than the agreed Settlement Date.

Old Language:

7E. Payment of Broker's Fee: Payment of Broker's Fee is due at Settlement. Settlement is a condition precedent to Buyer's obligation to pay the Broker's Fee unless Buyer, after contract acceptance, fails to perform or is otherwise in default of the sales contract. In such case, the Broker's fee in its entirety as specified in 7B is due from the Buyer no later than the agreed Settlement Date.

Form #912 - Residential Property Disclosure and Disclaimer Statement

The form has been revised to reflect a new law, which took effect October 1, 2007, and requires disclosure of the existence of carbon monoxide detectors.

Form #1300 - Contact of Sale, MAR Residential Contract

  • Paragraph 24 - Transfer Charges. This paragraph was revised to better conform to Maryland law. The paragraph explicitly states that the charges will be split, even if the buyer is a first-time buyer, unless the parties agree, in the attached addendum, to another arrangement. Also, a check box was inserted on the signature page to alert the settlement company of entitlement to the benefit of the reduction in State Transfer Tax.

  • Paragraph 30 - Ground Rent. In response to 2007 legislation, revised the ground rent disclosure paragraph, which provides for the notice contained in the addendum.
  • Paragraph 34 - Mediation. This paragraph was modified to permit Buyer or Seller to file an action if the right to file the action, protect an interest, or pursue a remedy would be precluded by the delay in first mediating the dispute. If Buyer or Seller files the action Buyer or Seller must accompany the initial pleading with a request to stay the action pending the conclusion of the mediation.
  • Paragraph 46 - Notice Concerning Conservation Easements. In response to 2007 legislation, a disclosure paragraph was added, which provides for the attachment of the notice contained in the addendum.
  • On page 11 of the Contract, "Broker/Agent ID" was changed to "Broker/Agent MLS ID."

Form #1342 - Notice Regarding State Disclosure/Disclaimer Statement

The form has been revised to reflect a new law, which took effect October 1, 2007, and requires disclosure of the existence of carbon monoxide detectors.

Form #1344 - Home Inspection Notice

The committee changed the layout of the form for greater ease of use;

  1. Put bold boxes around the two main sections, as well as a bold bar between Sections 1 and 2.

  2. Added a signature line in Section 1.

  3. Assigned line numbers or letters for all spaces on the first page for ease of cross referencing in other sections of this form.

Next, to help our membership avoid the mistake of putting the incorrect types of items in section 1, which should have been placed in section 2, or vice versa, the committee added explanatory/educational clauses. While none of these changes really alters the mechanics of use of this form that have existed since its creation, this new language will help our members avoid mistakes.

Finally, to allow a buyer to ask for a licensed contractor to rectify items raised in EITHER section 1 or section 2, we added the language on the second page stating that: "The Seller shall have the following enumerated items from EITHER OR BOTH OF the above list(S).............". (New Language Capitalized).

Form #1359 - Conservation Easements Disclosure

During the 2007 Session of the Maryland General Assembly, the Legislature passed House Bill 465 and Companion Bill 511, which have now been signed by Governor O'Malley and which took effect at midnight, October 1, 2007.

Under the new law, every contract of sale must contain a notice to the purchaser as to whether the property is encumbered by one or more conservation easement(s) or other restrictions limiting or affecting uses of the property.

The conservation easement(s) covered by this new law include easements which are recorded among the Land Records of the County in which the property is located for the benefit of the Maryland Environmental Trust; the Maryland Historical Trust; the Maryland Agricultural Land Preservation Foundation; the Maryland Department of Natural Resources; or a land trust.

The required contract of sale notice is specified in the statute. The Maryland Association of REALTORS® has prepared an addendum which contains the required statutory notice and was disseminated to local Boards and Associations of REALTORS® on or before October 1, 2007.

The new law poses severe liability to REALTORS®.

Form #1360 - Addendum - Property Subject to Ground Rent

The new addendum/disclosure must be used if the property is subject to a ground rent. This law took effect July 1, 2007.