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CANCELLATION AND RELEASE form

hi everybody Davis parks program maximum one Greater Atlanta Realtors in today's contract tip has to do with how to properly fill out a termination and release agreement so let me share my screen and we'll go over the forms together so the first form we are going to go over is the GAR form Georgia Association of Realtors and it is the unilateral notice to terminate purchase and sale agreement and propose disbursement of earnest money and this is Garf form F 522 f 522 now unfortunately gar could these two separate issues on one form but these are two separate contractual issues the termination of a contract is one issue and the disbursement of the earnest money per that contract is a completely separate contractual issue a unilateral termination of an agreement is unilateral meaning you only need one party signature now any party may terminate a contract the issue is did that party terminate by default or did that party terminate by an unexpired contingency and based on that has to do with the disbursement of the earnest money but again this is unilateral so it means you only need one party signature and that's why it has the or right here so how you would fill this out as you give the date of the notice the buyers name in the sellers name the property address now you are going to complete is it the buyer who is terminating the contract or the seller who is terminating the contract and then you simply fill out this reason check one of these boxes so for example if a buyer is terminating and they are terminating within their due diligence period that has not yet expired all you need to do is check this box that says buyers right to terminate during the due diligence period set forth in the agreement you do not need a reason you don't need to say it's because of the inspection or zoning or whatever reason the seller has given the buyer the right to terminate for any or no reason so all you complete is buyers right to terminate during the due diligence period then you have your buyer sign it now if the buyer is terminating under the financing contingency then you would fill out B for example the failure of the following contingency to which this agreement is subject and you would simply put financing contingency so that's the B is where you would fill out for any other contractual contingency that the buyer and seller agreed to so that would be for example financing contingency phrasal contingency sale or lease of a person's home contingency so forth or or other then if there is a default you would put the following well I'll come back to that in a second for other lawful reason that is not further explanation on why a buyer is terminating under due diligence or why a buyer is terminating under the contingency that is other lawful reason an example of that would be for example in the purchase and sale agreement it does say that the buyer has the right to examine the title if they find an issue with the title they have to give notice to the seller and then the seller has the right to cure the title by closing or terminate so that would be I'm sorry or then the buyer control me so that would be other lawful reason another time you would put other lawful reason is let's say for example that a buyer or a seller one of the parties simply does not show up to closing in that instance you would wait until the day after closing and then you would fill out other Lorre so let's say the buyer just fails to show up closing in in that situation for example you would fill out the cellar is terminating the contract because the contract the closing date has come and gone and it didn't close so the following day it would be other lawful reason wire failed to show up for closing and then one of the parties would sign it so again the termination of a contract can be done by any party but depending on which party terminates is going to be if they terminated by default or if they terminated by that would be under the default that would be the buyer and following to fall from the screaming fire failed to show up for closing so other lawful reason for example would be something else allowed for in the contingency I'm sorry in the contract then under the proposed disbursement of earnest money the party unilaterally terminating this agreement proposes that the earnest money and all other funds currently being held by the broker could hold her collectively earnest money shall be dispersed as follows and all of you put in here is the by the amount of the Armand the party's name who you are proposing gets the earnest money now this could be the whole amount of earnest money that the holder is holding for example five thousand dollars to buyer John and Jane Doe or the parties can choose to divide up the money so it could be three thousand dollars to buyer Jane Doe and two thousand dollars to seller Jolly Rodger whatever whatever the parties agree to is what you write out here but this is going to be the amount of the earnest money and the buyers name or the sellers name whomever the parties agree now down here you have an end and the this has to be agreement so where as a termination of a contract is unilateral in order for the holder to disperse the uh tournament the holder must have agreement meaning we must have the buyer and the seller signature agreeing on the disbursement of the urn this is awesome in keeping with license law which is Gregor world 520 - 1 - point oh eight under managing trust accounts and trust funds under disbursements 3 before it says that the holder made his first earnest money upon securing a written agreement which is signed by all parties having an interest in the trust funds and is separate from the contract which directs the broker to hold the funds so for example let's say a buyer terminates the contract clearly within their due diligence timeframe just because they do that if we do not get the seller signature on this we cannot disperse those funds simply by from the contract itself based on license law we must have written agreement in a document separate from the document that directed us to hold the funds well the contract is the document that directed us to follow the funds so we need their signature on here now there is another gar form that is available to you that is called a mutual agreement to terminate purchase and sale agreement and disperse the earnest money in this this is a mutual meaning both parties agreement to terminate so in this form you are required to have both buyer and seller signature this in essence is almost like an out-of-court settlement agreement if there was or even if there was not an issue so this has language where everybody agrees to terminate and it does it also addresses all the funds to be dispersed per the termination so for example if the party whichever party is terminating if there is money owed or agreed upon to pay the selling broker or the listing broker then that amount is that I hear amount paid by seller to the selling broker under the agreement amount paid by buyer to the selling broker amount paid by seller to the listing broker amount paid by buyer to go to the by the buyer to the listing broker seller to the listing broker and then we have the earnest money and this can be the earnest money can be divided up in whole or partial payments depending on what the parties agree to so that gets directed there and then you do this form does since it's a mutual agreement you do need both buyer and seller signature additionally there is the hold harmless language in this mutual agreement to terminate the purchase and sale agreement and disperse the earnest money and that language is contained right here upon the happening of these events buyer and seller further release each other and all real-estate brokerage firms brokers and their affiliated licensees involved in the transaction reflected in the above agreement each of whom Chuck's for a third-party beneficiary from any and all claims causes of actions damages so forth and so on so again this is a a good form to use to just have everybody indicate that there is a mutual release so not only do the buyer and the seller and sign this one but the brokers sign this form as well now if you are binding on the RA forms contract then in our forms contract B there are two separate forms are e this is our E 263 and this is the termination this is notice to withdraw or terminate so when it says to withdraw the unaccepted offer or counteroffer that is in the process of negotiation if a party decides to withdraw their last counteroffer then you would withdraw that but if you are already binding then you will already have an accepted contract with the acceptance state and the re forms packages use the term acceptance state to indicate the binding agreement date and you are terminating the contract you would write out the reason for the termination and then again termination is notice notice is unilateral so you are going to have either the buyer or the seller sign the termination then you are going to all so use a separate re form and this is re 212 agreement to disperse trust funds and again agreement indicates more than one person so you are going to fill out this is agreement to disperse trust funds earnest money acceptance date location of the property for purchase and sale agreement the trust funds being held by you name the holder of the earnest money the amount of money payable to and that would be either the buyers name or the seller same at the following address and this form since it is agreement you will need both the buyers signature and the sellers signature so again if you are finding on the re forms you need two forms you need the agreement to disperse trust funds and the actual notice to terminate if you are on the GAR forms then you will need just this one form either the unilateral notice to terminate purchase and sale terminate purchase and sale agreement and propose disbursement of earnest money or you can use the mutual agreement to terminate and purchase purchase the sale and dispersing the earnest money now I will let you know also if for example a buyer terminates a contract within their due diligence period or for whatever reason and the buyer has not yet been contractually obligated to remit the earnest money you still must address the proposed disbursement of earnest money in the release section so for example let's go back to a purchase and sale agreement for example if you have that here in this section if you have the earnest money shall be paid whatever form and you check be X amount of dollars within let's say here we have five days of the binding agreement date and then let's say the buyer actually terminates on day two from the binding agreement date then even though the buyer has not yet remitted the funds if earnest-money is addressed in the creation of a contract it must also be addressed in the termination of a contract so you still have to address it here in the proposed disbursement of earnest money so all you would write is buyer to retain earnest money not yet remitted per paragraph a 7b of the purchase and sale agreement so again since its addressed in the creation of a contract you must also address it in the termination of a contract regardless of the buyers obligations who have even remitted the trust funds a prior to the time they are actually terminating the contract so I hope this contract tip helped you out thank you guys so much for watching Dana sparks Broker of maximum one Greater Atlanta Realtors satisfying your needs for service innovation and education oh one more thing the holder of the earnest money more than likely is also going to need the mailing address of the party that is giving the trust funds so that the holder can disperse the funds to that party most brokers will disperse it I bill pay or sending it in the mail and so it's very important that the holder of the earnest money have the mailing address and contact information of the party that is receiving the earnest money and you saw in the re forms there is a place for their address bar forms doesn't have that but you are more than welcome to add it in regardless make sure the holder knows where to send the funds now thank you so much for watching I'm data with maximum one Greater Atlanta Realtors satisfying your needs with service innovation and education you