With the new year came the unveiling of the hottest new product in Illinois real estate, the latest and greatest edition of a boilerplate contract known as the “Multi-Board Residential Real Estate Contract 7.0”, which I will refer to as the “7.0”. It really only concerns real estate brokers and real estate attorneys so if you are not one of those, feel free to stop reading.
I won’t get into the self-explanatory revisions in the 7.0, due to some homes having wine fridges, but rather highlight some changes that are useful, or at least relevant. The first such change (line 10) requires that the property being sold be identified as a “single-family attached” (condo or townhouse), “single family detached” (commonly known as a house), or “multi-unit” (often an apartment building or mixed-use property). I like this. As an attorney it is useful to immediately know what type of property your client is buying/selling and gives you a warning that the parties are using the wrong contract if “multi-unit” is checked. Really, this contract should be strictly used for condos and houses.
Next, the financing contingency, now in paragraph 7, does away with the ridiculous “Intent to Proceed” provision of the previous version (6.1). Not once has any buyer complied with that provision, and has anyone cared. However, the 7.0 now sets the financing contingency date “[n]ot later than forty-five (45) days after Date of Acceptance or five (5) Business Days prior to the date of Closing, whichever is earlier…”. Not a fan. Say goodbye to the thirty-day closing; this revision is meant to make everyone lazier. Also, this section could have included the requirement that the property must appraise at or above the purchase price, which is found in just about every attorney modification letter.
Another, rather effective change, and one that hits close to home is in the attorney review provision of the 7.0 found in paragraph 10. The previous 6.1 version stated that either party could terminate the contract if “within 10 days”, both sides could not come to an agreement on the proposed modifications to the contract; this has now been revised to “if after the expiration of 10 business days”…This is significant because, as an example, I once saved a very significant transaction by withdrawing all the proposed modifications when the opposing side tried to terminate the deal based on their disapproval of the proposed modifications before the expiration of 10 business days. Now it is clear that no one can terminate until after the expiration of the 10 business-day period.
A somewhat seller-friendly modification found its way into the inspection contingency of the 7.0. Now, minor repairs, routine maintenance items and painting, decorating or other items of a cosmetic nature are no longer reasons upon which a buyer can terminate the contract, regardless of the cost to repair those items. Considering that buyers request credits or repairs even when the “as-is” paragraph is in effect, I doubt this will restrain buyers from haggling for a few hundred bucks.
Finally, paragraph 22 of the 7.0 now requires sellers to disclose whether there are improvements to the property which are not included in the most recent tax assessment, and whether there are improvements eligible for the home improvement exemption. In my opinion, this is asking a lot of the seller; it may be difficult if not impossible to know this information for certain. Who knows if the assessor caught that you finished your basement? And if you answer that there are such improvements, what next? And by the way, when was the most recent tax assessment?
In summary, these every-so-often iterations of the Multi-Board Real Estate Contract come with some good and some bad. The 7.0 is no different.
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