A Seller, Buyer, and Realtor Alert

Amenities What Amenities

Here is the scenario. A seller and buyer have just signed a contract for the sale and purchase of a wonderful home or condominium unit in a high end community with a luxurious clubhouse, an amazing golf course and lodge, multiple pools of Olympic proportions, a spacious spa, a large state of the art gym, and a beautiful beachside or lakeside pavilion. Then catastrophe strikes. A huge fire a monster hurricane or a massive sinkhole destroys all or a substantial portion of these amenities yet the home or condominium unit suffers only minor superficial damage.

The seller wants to complete the sale of the property saying I have a contract and need the sales proceeds to buy the new home I have under contract. The buyer says Wait there is no clubhouse for parties. I cannot go swimming or golfing. I cannot work out or get massages. I cannot even reach these locations because the roads are blocked. There are going to be association assessments to pay for the damage. I want to cancel the contract or at the very least receive a price reduction.

Where is the contract. What does it say about the situation. If nothing was a contract addendum added that covers this matter.

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A. The Difference Between the Contracts

Does the most used real estate contract in Florida the Florida Realtors and The Florida Bar Residential Contract for Sale and Purchase often called the FAR slash BAR Contract address this issue. No. What about its As Is version. No. Does either version have an addendum to address the issue. No.

However the separate Florida Realtors Contract for Residential Sale and Purchase often called the FAR Contract and its As Is version do address this issue. For condominium units this is handled in the Condominium Association Addendum. For subdivision homes and lots this is handled in the Homeowners Association Addendum.

B. The Fix

Until the FAR slash BAR Contract is updated use the following model language. The first is a Common Elements Damage Addendum based upon the FAR Contract Condominium Association Addendum for the sale and purchase of condominium units. The second is a Subdivision Amenities Damage Addendum based upon the FAR Contract Homeowners Association Addendum for the sale and purchase of subdivision homes and lots.

Common Elements Damage Addendum

To Residential Contract for Sale and Purchase

Seller ____________________________
Buyer ____________________________
Property ____________________________
Date ____________________________

1. Common Elements Damage. The Contract definition of Property includes not only the condominium unit described in the Contract but also its undivided ownership share in the condominium development common elements or its rights to use any master association amenities collectively the common elements. Regarding damage to the Property Contract Paragraph 18 M shall apply only to the condominium unit not to the common elements. This paragraph shall apply to damage to the common elements. If any portion of the common elements is damaged by fire hurricane or other casualty before Closing either party may cancel this Contract and Buyer deposit funds will be refunded if i as a result of damage to the common elements the Property appraises below the purchase price and either the parties cannot agree on a new purchase price or Buyer elects not to proceed or ii the association or master association cannot determine if there will be an assessment attributable to the Property and its amount for the common elements damage at least five days before Closing or iii the assessment determined or imposed by the association or master association attributable to the Property for damage to the common elements is greater than $ __________ or _____ percent one and one half percent if left blank of the Property purchase price.
2. Counterparts and Copies. This Addendum may be executed in several counterpart documents each of which shall be construed as an original and all so executed will together constitute one Addendum binding on all the parties notwithstanding that all the parties may not be signatories to the same counterpart. The signature pages from all original counterparts may be assembled and made a part of a single original document. Copies of this signed Addendum shall be considered as originals. Transmission of this executed Addendum by facsimile or email by one party to another shall be considered and deemed for all legal purposes the delivery of original documents with original signatures and initials and binding.

Seller ____________________________   Buyer ____________________________
Seller ____________________________   Buyer ____________________________

Subdivision Amenities Damage Addendum

To Residential Contract for Sale and Purchase

Seller ____________________________
Buyer ____________________________
Property ____________________________
Date ____________________________

1. Amenities Damage. If any portion of the amenities or other property of or to be conveyed to the homeowners association or any master association of the subdivision in which the Property is located collectively the Amenities are damaged by fire hurricane or other casualty before Closing either party may cancel this Contract and Buyer deposit funds will be refunded if i as a result of damage to the Amenities the Property appraises below the purchase price and either the parties cannot agree on a new purchase price or Buyer elects not to proceed or ii the association or master association cannot determine if there will be an assessment attributable to the Property and its amount for the damage to the Amenities at least five days before Closing or iii the assessment determined or imposed by the association or master association attributable to the Property for damage to the Amenities is greater than $ __________ or _____ percent one and one half percent if left blank of the Property purchase price.
2. Counterparts and Copies. This Addendum may be executed in several counterpart documents each of which shall be construed as an original and all so executed will together constitute one Addendum binding on all the parties notwithstanding that all the parties may not be signatories to the same counterpart. The signature pages from all original counterparts may be assembled and made a part of a single original document. Copies of this signed Addendum shall be considered as originals. Transmission of this executed Addendum by facsimile or email by one party to another shall be considered and deemed for all legal purposes the delivery of original documents with original signatures and initials and binding.

Seller ____________________________   Buyer ____________________________
Seller ____________________________   Buyer ____________________________

C. Conclusion

We hope this alert provides useful guidance regarding the need to address possible damage to amenities in the FAR slash BAR Contract. If you have questions about addressing possible damage to amenities in the FAR slash BAR Contract please call 941 741 8224 or email us. Use the first letter of an attorney first name followed by the last name at BarnesWalker dot com. As always we will answer questions within reason at no charge.

With warm regards

Garret T Barnes   Adron H Walker
John J Shea Jr   Stephanie M Cua

Important Note

The information in this Barnes Walker Educational Series article is summary in nature and does not cover all aspects of the law as it pertains to addressing possible damage to amenities in the FAR slash BAR Contract. It is provided for educational purposes for the benefit of sellers buyers and members of the Realtor Association of Sarasota and Manatee Inc of which we are an affiliate member. This article should not be considered legal advice for any situation and is not intended as specific or detailed advice. It is not an all inclusive discussion but a guide and there may be other matters not described that could impact a particular situation. Always seek legal advice regarding your unique circumstances. This article is intended as a public service and is not a solicitation for legal employment.