In addition to the standard “FAR/BAR” contract, there are several other disclosures, addenda, and types of contracts you may see in different situations along the way. Here are a few of the more common ones you may see in contracts for homes in Florida retirement communities.
Buying a Home “As-Is”
Sometimes in your search for a home you will come across a home being sold “as-is”. This means that you are allowed to have your inspections done, just like a normal sales scenario but the owner will not be responsible for fixing anything you may find wrong with the place. Many people errantly believe that any home being sold “as-is” is a “handyman’s special” that will require lots of work to be made habitable. This is simply not always the case.
It’s true that is sometimes the owner’s reason for selling a place “as-is,” but in my experience the reason the seller chooses this route is more often just a matter of convenience. Another reason might be as a point of negotiation. For instance, you may make an offer for twenty thousand less than what the seller is asking for a home, and the seller could agree but add the caveat that you must buy it “as-is.” You the buyer, of course, will have to do your own research to see which of these scenarios are true for the house you are considering.
Should you decide to contract for a home being sold “as-is,” the contract can be done one of two ways. It can be prepared as a normal contract would be done with an “As-Is” Rider attached to made part of the FAR/BAR Contract for Sale and Purchase, or it can be prepared as a separate “As-Is” Contract for Sale and Purchase.
“As-Is” Rider to the FAR/BAR Contract for Sale and Purchase
This is a document to be completed and initialed by both parties, buyer and seller, which becomes part of the Contract for Sale and Purchase. This document effectively deletes Standards D (Wood Destroying Organisms), N (Inspection and Repair), and X (as it relates to Repair Standards) of the Contract for Sale and Purchase. The seller is still required to disclose all known facts that affect the value of the property. However, the seller makes no representation as to the physical condition of the property.
As the buyer in this scenario, you are given the right to inspect the property as you would under normal circumstances, but you are also given the right to cancel the contract, should you not be satisfied with the findings of the inspection or do not wish to pay for the repairs that need to be made. You will be given a certain number of days to conduct your inspections and you must let the seller know of your intention to cancel in writing during that allotted time, should you decide you do not want to proceed with the purchase.
“As-Is” Contract for Sale and Purchase
The first thing you’ll notice is that at the top of the page “AS-IS” in LARGE BOLD letters, so you can’t be confused as to what you are signing. The main differences between this contract, and a normal contract we discussed previously is the deletion of standard “D” (Wood Destroying Organisms) and standard “N” (Inspection and Repair). Another difference is the addition of another standard, standard “Z”. Standard “Z” in the “As-Is” Contract for Sale and Purchase says that you the buyer waive all claims against the seller, or any real estate agent involved in the transaction, should you discover any defects or damage after closing. The seller is still required to disclose all known defects or damage, and of course you have the normal time period for inspections to be conducted.
Homeowners’ Association Disclosure
The Homeowners’ Association Disclosure, required by Florida Statute 720.401 is one of the more plainly written documents you will come across during your real estate transactions here in Florida. There are eight statements on the current Homeowners’ Association Disclosure. Keep in mind this document only applies to communities where there is an obligation to be a member of the Homeowners Association.
1. Simply lets you know that you will be obligated to be a member of a Homeowners’ Association.
2. States that there are or will be restrictive covenants that govern the property.
3. If there is a fee (assessment) to be a member of the homeowners’ association, the fee is noted here. Also, if there are any special assessments owed it will be noted here.
4. Gives you warning that if you do not pay the above-mentioned assessments, a lien can be placed on your property.
5. If there is a mandatory fee to use certain facilities in a community, it will be noted here. For instance, some associations have pools or clubhouses that you are required to pay to use.
6. Lets you know whether or not the covenants or rules of the association can be changed without the approval of the association membership. It is preferable that they cannot be changed without the approval of the association membership.
7. Tells you that the statements in the disclosure are only summary in nature and that you should read the covenants and restrictions of the association before purchasing property there.
8. This lets you know that a homeowners’ association’s covenants and restrictions are a matter of public record and can be obtained from the record office of the county where the property is located.
