Basic REPC Misunderstandings
July 1, 2019
I want to address two basic REPC misunderstandings that I frequently encounter on the hotline.
First, let’s say Buyer and Seller are under contract. During the Buyer’s Due Diligence, the Buyer sends over an addendum asking the Seller to complete three specific repairs. The Seller never signs or agrees to the addendum. What happens to the contract?
YOU STILL HAVE A CONTRACT. Just because an addendum attempting to modify an existing REPC expires, this DOES NOT mean the entire REPC falls apart. You simply keep the same existing terms of the REPC. Sellers do not have to agree to proposed contractual modifications to the REPC, but they do have to honor what they have already agreed to.
Second, let’s say a Buyer #1 and Seller are under contract. Seller then receives a much higher offer from Buyer #2. Seller now wants to move forward with Buyer #2. Does the Seller have an out with Buyer #1?
In general, the answer is no. If a Seller cancels the contract without a right to do so, then this creates a default scenario which triggers Section 16.2 of the REPC. Please be aware that in this Section, the BUYER gets to CHOOSE the remedy for the Seller’s default, which may include a sum equal to the earnest money, specific performance, or any other remedies available at law.
If you have any questions, feel free to call the UAR’s Legal Hotline at 801-676-5211 on Monday, Wednesday, or Friday from 8:30 a.m. to 4:00 p.m.