By Scott C. Minter and Richard Staff
2000 Edition; 224 pages, $30.00
This popular handbook is a basic and current source book for
drafting contingencyclause language and other common contractual
provisions. The handbook contains sampleclauses dealing with issues
raised in real estate transactions. The clauses were collectedfrom real
estate professionals throughout Wisconsin. The result is an up-to-date
collection of contract
clauses which are typically inserted into real estate offers
topurchase. Also included in this handbook are checklists to follow in
the draftingof offers and counteroffers.
This 2000 edition adds 70 new clauses to bring the total number of
suggested clauses to130. The updated text discusses the revised offers
to purchase approved by the Departmentof Regulation and Licensing which
now contain contingency provisions. The new offers topurchase approved
by the department are included as appendices, along with
WisconsinREALTORS® Association preprinted addenda containing
contingencies.
PART A: DRAFTING CONSIDERATIONS AND ADVICE
I. The Need for Care in Drafting
II. Legal Effect of the Offer to Purchase
III. General Suggestions for Drafting Contingencies and Other Clauses
IV. Drafting Financing and Other Contingency Clauses
V. Regulatory Framework for Drafting Clauses by Licensees
VI. Providing Notices Relating to Contingencies
VII. Drafting Checklists
PART B: SAMPLE CLAUSES
Section 1: Financing Contingencies
- Mortgage
- Special Mortgage Provisions: Balloon Payment
- Special Mortgage Provisions: Insured Mortgage (FHA Loan)
- Special Mortgage Provisions: VA Loan
- Special Mortgage Provisions: Direct Loan (WHEDA)
- Special Mortgage Provisions: Direct Loan (FmHA)
- Special Mortgage Provisions: Payment- Interest Only
- Special Mortgage Provisions: Special Principal Payments
- Second Mortgage (Third Party Lender)
- Second Mortgage (Seller Financing)
- Open End Mortgage
- Blanket Mortgage
- Assumption
- Land Contract
Section 2: Inspections, Approvals, and Permits
- Map of the Property
- Lot Size and Boundaries/Survey
- Appraisal
- Home Inspection
- Third Party Inspection
- Buyer Inspection
- Approval of Property
- Attorney Approval: Buyer
- Attorney Approval: Seller
- Septic Permit
- Septic Soils Test
- Private Sanitary System Inspection
- Sanitary District Sewer Construction
- Soils Test
- Lateral Hook-up Costs
- Well Water Test
- Well System Inspection
- Active or Abandoned Wells
- Termite/Pest Inspection
- Code Compliance
- Rental Weatherization: Buyer to Pay Costs of Certificate
- Rental Weatherization: Buyer and Seller to Share Costs of Stipulation
- Highway Access
- Land Use Approval (Rezoning, Permit, or License)
- Zoning Classification Confirmation
- Joint Driveway/Well
- Shared Driveway
- Shared Well
- Private Covenants and Private Building and Use Restrictions
- Testing
Section 3: Contingencies Related to the Sale or Purchase of Other Property
- Sale of Other Property by Buyer
- Sale of Buyer's Property / Subject to Sale: No Accepted Offer on Buyer's Property orAccepted Offer with ContingenciesOther Than Financing
- Sale of Buyer's Property / Subject to Sale: Accepted Offer on Buyer's Property-Contingency Free or Subject Only to Financing/No Bump Clause
- Priority Clause (Bump Clause)
- Secondary Offer: No Priority Clause
- Secondary Offer: Priority Clause
- Purchase of Other Property by Seller
- Waiver of Contingency
Section 4: Miscellaneous Provisions
- Repairs (Nondefective Conditions)
- Property Tax Credit (Lottery Credit)
- Lottery Tax Credit
- Property Tax Proration: Individual Property/Areawide Reassessment
- Personal Property: Valuation and Transfer
- Closing Fees
- Closing Documentation Provisions: Municipal Report/Code Compliance
- Closing Documentation Provisions
- Title Insurance/Abstract/Gap Insurance
- Escrow Closing
Section 5: Representations and Disclosures
- As-Is
- Insulation: New Homes
- Land Use
- Zoning and Building Restrictions, Comprehensive Plans
- Legal Nonconforming Use
- Historic Building Status
- Historic District
- Acceptance or Acknowledgment of Defect or Condition
- Encroachments: Acknowledgment by Buyer
- Water Supply
- Well/Septic: As-Is
- Asbestos, Lead, Lead-Based Paint, and Radon Gas
- Asbestos, Lead, Radon Gas, and Other Hazardous Substances
- Hazardous Substances
- Floodplain, Wetland, and Shoreland Regulations
- Underground (UST) and Above Ground Storage Tanks
- Basement Fuel Oil Tanks
- Buyer Reliance: Buyer's Responsibility to Ascertain Condition of the Property andMaterial Facts
Section 6: Disclosures by Broker
- Broker is Buyer
- Broker is a Relative of Buyer
- Broker is Seller
- Broker is a Relative of Seller
- Inspections, Tests, Appraisals, and Opinions
- Broker: Disclosure of Personal Interest, Fees, and Profits
- Home Warranty Program
Section 7: Accepting the Contract and Satisfying Contingencies
- Duty to Use Good Faith in Satisfying Contingencies; Waiver of Claims; Hold Harmless fromActs by Inspectors
- Days - Definition
- Days and Hours - Definition
- Acceptance, Amendments, and Notices by Electronic Means
- Delivery/Receipt
- Reading/Understanding of Entire Offer
Section 8: Rental Properties
- For Rent Sign
- Rental Property
- Occupancy: Occupancy Charge
- Occupancy: Security Deposit
- Occupancy: Insurance
- Occupancy: Utilities
- Occupancy: Maintenance
- Occupancy: Keys
- Occupancy: Use of Property
- Occupancy: Quiet Enjoyment
- Occupancy: Hold Harmless
- Occupancy: Property Taxes
- Occupancy: Not Landlord-Tenant
- Occupancy: Termination
Section 9: Commercial and Business Offer Provisions
- Commercial: Document Review/Receipt
- Commercial: Environmental Evaluation/Assessment
- Commercial: Inspection
- Business: Document Review/Receipt; Obtaining Licenses and Leases
- Business: Bulk Sales
- Business: Allocation of Purchase Price
- Business: Sales Tax
FORMS
- WB-11 Residential Offer to Purchase
- WB-12 Farm Offer to Purchase
- WB-13 Vacant Land Offer to Purchase
- WB-14 Residential Condominium Offer to Purchase
- WB-15 Commercial Offer to Purchase
- WB-16 Business Offer to Purchase
- WB-16a Addendum to Business Offer to Purchase
- Addendum A to the Offer to Purchase, WRA
- Addendum B to the Offer to Purchase, WRA
- Addendum O to the Offer to Purchase -Occupancy Agreement, WRA
- Addendum R to the Offer to Purchase - Rental Properties, WRA
- Agreement for Binding Arbitration, WRA
- WB-25 Bill of Sale
- WB-40 Amendment to Offer to Purchase
- WB-41 Notice Relating to Offer to Purchase
- WB-44 Counter-Offer
- WB-45 Cancellation Agreement and Mutual Release