As of November 1, 2021, the Florida FAR-BAR contract has changed. All agreements since then must use the updated version. The standard Florida Association of Realtors/Florida Bar contract 2021 updates include various major changes which are summarized and explained below.
Florida FAR-BAR Contract – Major Updates:
Loan Approval Period – Section 8(b)
The 2021 Florida FAR-BAR contract changes now require two new tasks to be completed during the loan approval period.
- The buyer’s lender must have a ‘satisfactory’ appraisal during the loan approval period.
- Buyers must gain financing approval as per the terms in the section.
Although the previous version of the Florida FAR-BAR contract also required that buyers gain financing approvals as per the terms of this section, the 2021 update applies a strict deadline.
This new requirement has been included to help speed up the receipt of appraisals if they’re required by the lender.
In the past, there was always a risk of low appraisals causing a transaction to fail even during closing if the appraisal was completed that late.
As of November 2021, low appraisals still pose a threat to a transaction. But with the obligation to have an appraisal during the approval period, sellers have the chance to put their property back on the market far faster.
Loan Approval – Section 8(b)(i)
This section completely changes the definition of ‘loan approval’ in Florida. Under the 2021 Florida FAR-BAR contract, there are two new updates:
- A buyer is approved for financing provided for in the contract
- The lender receives a satisfactory appraisal if required.
What does this mean? It is no longer considered a ‘loan approval’ if a buyer gains approval for financing if there is a condition that an appraisal must be completed in the future.
Delivery Methods – Section 19, Standard O
The 2021 updates have also changed the methods for the delivery notice.
- Fax and email are now permitted for notice delivery.
- Mail and personal delivery options remain.
- Text messaging can no longer be used to provide notice. As they can be erased or lost, they’ve been deemed an unreliable method for providing evidence.
- Social media postings or any other type of unnamed communication does not constitute delivery for the purpose of giving notice.
Other New Florida FAR-BAR Contract Changes
Other less notable but still important-to-know changes have been made, including:
- ‘Personal property’ now includes doorbells, television wall mounts and mounting hardware, thermostats, mailbox keys, storm protection hardware and items.
- Intercoms are no longer considered ‘personal property’.
Extension Period for Closing Dates
- Extension periods for closing dates provided for under the CFPB’s (Consumer Finance Protection Bureau) delivery requirements have been reduced from ten days to seven days.
- Extension periods for closing dates are only automatic if the loan has been approved via underwriting before the originally agreed closing date.
Loan Approval Notifying
- Buyers now have the ability to wait until the end of the Loan Approval Period to inform the seller that the loan has been approved.
- In the past buyers had to notify sellers ‘promptly’.
- FIRTPA withholding and reporting costs have been added as an item to be paid by the seller.
- FAR-BAR contracts now include disclosures tied to existing short-term vacation rentals in the ‘occupancy clause’.
- Closing now states that “all funds required for closing are received by the closing agent and collects pursuant to STANDARD S”
Time Calculation Clarifications
- A ‘calendar day’ is now determined by where the property is located. Clarifications are included for when a time period ends, such as on Saturdays, Sundays and national holidays.
- There is no longer an ‘end of business day’ cut-off for notifications that extend.
- Holidays that might extend the timeline include:
- New Year’s Day
- January 1
- Birthday of Martin Luther King, Jr.
- The 3rd Monday in January
- Washington’s Birthday
- The 3rd Monday in February
- Memorial Day
- The last Monday in May
- Independence Day
- July 4
- Labor Day
- The 1st Monday in September
- Columbus Day
- The 2nd Monday in October
- Veterans Day
- November 11
- Thanksgiving Day
- The 4th Thursday in November
- Christmas Day
COVID-19 Related Force Majeure
- Force Majeure now includes “governmental actions and mandates, government shutdowns, epidemics or pandemics”, to protect buyers and sellers from COVID-19 related events.
Update and New Riders
There have also been various riders updated and added such as:
- Mold Inspection
- Seasonal and Vacation Rentals
- Pace Disclosure Riders
If they are relevant to your purchase or sale, we advise that you review the new Florida FAR-BAR Contract in its entirety. Doing so can help you avoid problems later. If you need any assistance, we welcome you to contact our Florida real estate lawyers.
Florida FAR-BAR Contract FAQs:
What is the Florida FAR-BAR Contract?
The Florida FAR-BAR contract is a ‘standard form agreement’ created by ‘The Florida Bar’ and ‘Florida Association of Realtors’. The Florida FAR-BAR agreement is used in the sale of real estate in Florida.
What is the FAR-BAR Contract For?
The Florida FAR-BAR contract is designed to make real estate sales easier. It allows those involved in real estate sales to simply and quickly input information and meet all the necessary requirements. It provides a reliable, consistent and legally binding agreement for all involved.
FAR-BAR contracts include the following provisions:
- Sales price
- Closing date
How Do I Fill Out a Florida FAR-BAR Contract?
You can read our guide on how to fill out an ‘As-Is’ Florida FAR-BAR Contract here?
Can Anyone Use a FAR-BAR Contract?
The FAR-BAR contract was made to be usable for anyone involved in a real estate transaction. However, it is highly advised that you work with a Florida real estate lawyer when making a purchase or sale, including handling FAR-BAR contracts.
Lawyers have the professional expertise to avoid small mistakes that can later prove very costly.
Contact a Real Estate Lawyer in Florida for Real Estate Contracts
If you need help with a Florida real estate contract or any legal assistance in the sale or purchase of a property, then our Florida real estate lawyers can help.
Our attorneys, Howard Ross, Andrew Pardun and Robert Kapusta at Battaglia, Ross, Dicus & McQuaid, P.A. have extensive experience and will review your circumstances and provide advice on your contract and if required, draft or edit for you.
Contact us today to schedule a free consultation.