SCR Residential Contract Update
The SCR residential contract will update on September 1, 2017.
Summary of form changes
- In 2016, a Charleston BIC won his case at LLR for disbursing earnest money under the contract’s financing contingency. SCR considered this to have settled the issue with LLR investigators. Nevertheless, LLR investigators continued to target BIC’s so the form will revert to pre-2012 language requiring a disbursement agreement signed by all parties or a judge before a BIC may disburse earnest money. This change will revive the number of calls that you will receive from BIC’s and buyers who are upset the money is locked down after a failed closing…locked down earnest money in a failed closing resulted in a disgruntled buyer shooting a Fort Mill BIC in 2009 over $1000 in earnest money delayed in a magistrate interpleader lawsuit continuance. The contractual earnest money “triggers” will remain so a judge can award the earnest money to the buyers (e.g. due diligence, repair procedure, financing, appraisal contingency, CL100, casualty, permit contingency, short sale contingency). Earnest money shows the buyer is serious and is not liquidated damages for the seller to receive…sellers have remedies against a buyer who beaches the contract other than earnest money…seller sues the buyer for breach of contract damages and the seller’s attorneys fees which can lead to self settlement or mediator assisted self settlement.
- Repair procedure will use an inspection deadline set by the Effective Date + a _____ number of Business Days instead of the current fill in the blank with a calendar date. This will help the contract’s inspection deadline from going stale with a long negotiation period or short sale delays or long delays on a backup contract before becoming the primary contract.
- Wood Infestation section will have checkboxes to remove the CL100 from the contract instead of parties having to strike the section and initial and date. Buyers should be careful removing the CL100 contingency to save a few hundred dollars on the CL100 costs. As a forms member commented, there are two kinds of homes in SC….those that have had termite damage and those that will have termite damage.
- Due diligence and repair procedure are explained briefly to educate membership how to use both in a more professional manner. Hotline reports are that untrained members either do not understand the benefits of due diligence or falsely believe they can submit the repair request on the last day and unilaterally extend the due diligence period.