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Welcome! I'm Amy Fennell with Louisiana Realtors and today I have here with me Commissioner Rick Roberts. Hello good to be here! We're discussing the new or the updated changes to the residential agreement to buy or sell. There will be a new version that will become mandatory come January 1st of 2019. The form is currently available on LREC.gov for download and use but it won't be mandated till the first of the year. As a little bit of background typically the process or changes or updates to the contract are done by a joined work group of Louisiana Realtors as well as Louisiana Real Estate Commission staff, Commissioners, Educators, and title attorneys in the industry who kind of get together and take the feedback that we solicit from you in the field to kind of go into what updates and changes are made to the form. This year we did that process and had over 200 comments sent through and pulled the workgroup together and as a result the contract highlights what those updates and changes are. Rick do you anything like you said it's a it's a bifurcated effort by the Louisiana Real Estate Commission and Louisiana Realtors. We take all comments we evaluate all of them we take all suggestions throughout the year. I can tell you this if every everything that's sent in is given its due consideration and the changes that are made reflect those things that we get from those practitioners that work out in the field or if it's style attorneys that see something that we need to tweak or ad or if it's even something industry related such as the last contract was very much driven by when TRID was in place with the CFPB and those sorts of things. So it's it's it's your document it's a living breathing document that is in my opinion one of the most important tools that we use so it's always up for amending and changing as we change in our industry so yes it is it is it's a big effort with a lot of people involved so and I'm proud of what we have.Good! What we wanted to do today was go over the highlights of those updates keeping in mind that throughout 2019 the mandatory CE topic will be on this particular forum as well as other recommended addenda. With that we'll get started. What you have on the screen before you is a copy of that contract dated 1/1 /2019 we'll go along and highlight what those updates and changes are to the form and we'll also be pulling up the new deposit addendum to review as well. So let's get started Rick. Ok and again this is part of your mandatory education for next year so our goal here is maybe to give some insight on why maybe certain changes were made and how they came about. So anyway first page we look formatting brokerage is now in place instead a broker's name that's the third line on either side again just just formatting nothing really big to discuss there. Page 2 is where we kind of get into the meat of the changes. The the first change that you'll see that's that's a little bit different than significant is under contingency for sale a buyer's other property and in the past it just referred to the see addendum contingency clause addendum shall apply. What we did is added language found either in lines 301 or 307 or the attached addendum and this was an effort for those of us out in the field who more often would like to just simply write into the additional terms whatever the contingency is especially if it's property that's already under contract in using the addendum really didn't address that. We decided to make it a little bit easier if one wanted to use the additional terms it was referred to there in lines 301 307. Again this was something we got from a lot of practitioners that we made change to hopefully you'll find that easier to use in case you do decide not to use the the addendum for the contingency so that's the the biggest change on that particular page. If you drop down to the financing section lines 65. We added conventional mortgage and keep in mind too you can have you can have multiple boxes checked here for instance it could be conventional mortgage fixed-rate or conventional mortgage adjustable rate or owner financing fixed-rate it doesn't have to be just one box it could be multiple boxes that would apply so anyway it just gave another option of course you still have other which is there and and in a little more formatting we just took out a line on the other finance conditions because we trying to in effort to maybe save some trees and and reduce the pages although we didn't really accomplish that but that was the formatting on line 71. so anyway let's get to the the biggest change which is page three and it's regarding the deposit. So in the past if you recall on the current contract that we're using. Deposit shall be delivered immediately. Well, there's been a lot of consternation and pushback on what the definition of immediately was because my definition might be different from Amy's it might be different from many of yours out there. So in an effort to bring some clarity to this part of the contract we pre-printed 72 hours and the thought behind that was is 72 hours could take into account weekends and a calendar day which would be a weekday to get a deposit to listing broker to whoever was going to FedEx, mail perhaps but hopefully that could be accomplished in 72 hours. Now mind you if 72 hours don't suit you need you can surely amend that in the additional terms and make it four days five days whatever you so desire. There was a lot of discussion I was one of the ones who maybe suggested to put a blank there and you could put a time and date there but at the end of the day 72 hours seem the rule the day and that's what was put in line 109.The other salient change to the deposits that well first the formatting we we included electronic transfer because now that is a a widely held and used mechanism to get deposits so we included that electronic transfer but if you drop to Line 113 the deposit shall be held by... You can check one of three options listing broker, selling broker, or third party. Now the reasoning and rationale behind that is because it's been becomingen vogue for a lot of agents brokerages to have third parties hold deposits. Whether it's a title company it could be a builder it could be anyone for that matter could be considered a third party. the the the rationale with this information and we'll get to the box underneath it in delineating who's holding the deposit was because us as licensees and Realtors were not doing a good job of explaining what happens if they deposits held by a third party. It's very clear what happens when a listing broker or selling brokers holds a deposit because there's rules that are in place that the real estate commission put in place that those brokers must abide by but if a third parties is holding it there are no rules the check doesn't necessarily have to be negotiated it could be held by a third party it doesn't necessarily have to be put in a non interest-bearing account it could be put in initial , I mean there's a lot of things there that we weren't informing the public of so this was an effort to inform the public that if a third party holds it this is what can and cannot happen. Now I'm not saying hey Rick you know Rick I might want to have a title company hold it well buyer and seller can opt in contract to have anybody they won't hold it this is just informed consent to both buyer and seller. So if you go down to the box underneath it it explains pretty clearly and vividly what happens if a third party is holding deposit. Let me take a step back for a second now brokerages are not mandated to have an escrow account if they do not handle escrow funds they're not required by Louisiana Real Estate Commission to have an escrow account and that's totally understandable so if you write a contract in a listing company does not have an escrow fund you can have your company hold it that's not a problem the only time where we need some informed consent is third party so if you drop down to the box it clearly explains what can and can't happen and understanding of Louisiana Real Estate Commission may not have jurisdiction probably does not over those third parties holding the funds so buyer and seller would acknowledge that third parties holding it and there's also a reference to have them read the attached addendum. Now the attached addendum and can we show that okay is we have one on the commission website that is has suggested addendum mind you there's only two mandatory forms contract or buy sell agreement and the proper disclosure so the deposit addendum can be what you see on the Commission website it can be what your company is produced it's okay whatever you choose to use is fine but by signing in that box on that buy sell agreement they're acknowledging what can and can't happen with the deposit and that they've read the attached addendum will have that addendum may be that you use so it also says that the broker is not living required to disperse the security deposit accordance with the revised statute when a third party holes of deposit so the takeaway here is hey look buyer and seller can contract to have anybody they want hold of deposit if it's a third party meaning somebody other than the listing broker selling broker they have informed consent so that's probably the biggest change it if there's business models out there who's always have third parties holding deposit that's perfectly fine and okay. We just informed the public both buyer and seller what can and cannot happen so I'm sorry if I spent too much time on that but that's the most salient part of the contract and biggest change that we made on the buy sell agreement so I think that covered that, right Amy. I think so one of the questions that did come up was if you are having the deposit held by the listing or selling broker and you aren't checking that thirty third party box right then the signature lines on the bottom should just be filled out with not applicable (N/A) . Simply not applicable that's correct. Okay page four would be the next change it comes in this formatting again but it's number three under the return of deposit to the buyer and that is addressing if the seller declares the agreement null and avoid for failure buyer to comply with written document requirements as set forth in lines 83-85. So if the buyer cannot get verification from his lender aor his lender is not cooperating, the seller can can declare the contract null and void. However they cannot keep the deposit. The deposit would get returned back to the buyer. That is a change that was made in accordance with the financing section so that this comes on page four number three. We can skip down to, Amy, we have some formatting throughout nothing of great consequence until we get to well page seven. We added under the offender notification okay flood hazard information and again this is just some informational purposes of information for buyers regarding flood information that go to FEMA website if they want to pull up the flood zone of their property this gives them the website to do it along with offender notification and mold hazard related notices so anyway that was just another add-on to protection for the buyer. Let's continue on to page eight in the list of addenda we added deposit held by addendum so you can check that box if again the deposit checks and you you you select a third party you have buyer and seller sign in the box you could check off deposit held by addendum whichever addendum you so choose and that way it's part of the contract and it's this noted there.Of course you have your typical blank spots as well. The final I guess salient biggest change comes on the last page page nine and it is addressing the email addresses for buyers and sellers agent now if you recall in the past the lines had sellers agent email address buyers agent email address and seller or buyer email address. Well that caused a lot of consternation out in the field we didn't want to have agents with the ability to email the other agents clients and everybody was a little bit upset about that. I can tell you when we first put this change in back two years ago this was in the throws of TRID and we were trying to make it easier for title companies to correspond and deal with buyers and sellers but it got a skewed nobody filled it out nobody used it so we decided to simply take the seller and buyer off of there and just have sellers agent and buyer's agent email addresses which makes sense.To further clarify that lines 371 and 372 read the authorization contained in this section is not an authorization for the buyer's agent to communicate directly with the seller or a seller's agent to communicate directly with the buyer so if there's any confusion there that should clear it up that that was not an intent for some agent to circumvent their other agent colleague and go directly to their principal so that's reflected on lines 361 to 372 on the top of page. And then finally yes we took out the expiration of offer I'm sorry binding and irrevocable through you have of course date and time a.m. p.m. noon part of the rationale for that is all time frames for the buy sell agreement our Central Standard times and the day ends at 11:59 p.m. so if by some chance you're a night owl you decided to want to have the contract expire at midnight it wouldn't coincide with necessarily the expiration of time for our buy sell agreement which would be 11:59 p.m. so if you really had a penchant to make it good through the end of the night then you would simply write in 11:59 and check p.m. and then finally if you recall and again it was it was it was a two-fold effort here to maybe save a page on the contract and also get rid of another source of consternation which was under the buyer and under the sellers information we have street address city State telephone number work number all those things that never got filled out and again was some was taken as some as an invitation to contact the other agents client so we conveniently took all that information off and all you see reflected their signature lines and then the print for buyer or seller and again it's it's it was an effort to help title companies so they wouldn't have to call licensees to say hey give me a buyers information but of course nobody filled it out so we simply took it off. That pretty much covers the bulk of the changes again there's some formatting things here and there a lot of what we went over was taken directly from licensees and title attorneys for that matter who just saw that there were some things needed to be changed it would make our life a little bit easier. Again the biggest thing would be the the third party's holding deposits which there's no prohibition to do but this is just informed consent for buyer and seller on the contract that they will ratify by signature in an addendum what happens if so what good questions did we have anything that any other questions that we discovered along the way we had a lot of input on a lot of different things I can tell you by far the bulk of the comments we got in were regarding deposits. I think so and I think that's where a lot of the confusion comes in if there are still additional questions or things like that that you would like clarification on particularly with this document we will certainly provide you with all the information and links to be able to answer that and we'll try to you know get the best answer that we can for that but I think you know kudos to the workgroup and everybody who has put the hours and the time in to review all those comments and discuss them in detail and figure out what's the best way to change that so that we're all working from the same document. And again this is your document and we take the input we get especially from practitioners and licensees very seriously we take it all into consideration this is your document this is a one tool that we is the most valuable tool in our in our you know a box if you will because we're all using the same document and reading and going over so again if there's any questions comments we take them all the time even though it might not be a year that we make changes we memorialize all those and when it comes time to take that into account we do and again some of the changes are industry driven or whatever is happening out in the field up we see that needs to be changed or we get some input we'll make those changes. Great thank you Rick thank you for having me, appreciate it.