Legal hotline

By Chris Darby, Tom Muldoon, and John Nalls of Counselors Title, LLC, and Pardo & Drazin, LLC, General Counsel

QUESTION: I represent a seller on a GCAAR Sales Contract in which the buyer defaulted and agreed to forfeit his Earnest Money Deposit (EMD). I know that my broker is entitled to a portion of the EMD as part of the brokerage commission. How is the deposit split between the broker and seller?

ANSWER: Pursuant to Paragraph 25 (“DEFAULT”) of the GCAAR Sales Contract (GCAAR Form 1301): “If the Deposit is forfeited, or if there is an award of damages by a court or a compromise agreement between Seller and Buyer, Broker may accept and Seller agrees to pay Broker one-half of the Deposit in lieu of the Broker’s Fee, provid ed Broker’s share of any forfeited Deposit will not exceed the amount due under the listing agreement.”

QUESTION: My client is purchasing a newly constructed condominium in the District of Columbia. How much time does he have to review the Public Offering Statement (POS) and, if he chooses to do so, void the contract?

ANSWER: Pursuant to Section 42-1904.04, the seller of a newly constructed condominium must provide a Public Offering Statement (POS) to the buyer that shall disclose fully and accurately the characteristics of the condominium and the units therein offered and shall make known to prospective purchasers all unusual and material circumstances or features affecting the condominium. The POS must be on the form approved by the mayor and include a total of 13 items of information and copies of various documents, including budgets and the condominium declaration and deed. Under Section 42-1904.02, the seller may not sell a new condominium unit until the POS is provided to the buyer and the buyer has an absolute right to cancel the contract within 15 days of execution of the contract or within 15 days after delivery of the current POS, whichever is later. A purchaser of a condominium that is being re-sold (not new construction) is entitled to a different type of disclosure and has a much shorter time to cancel (three business days).

QUESTION: I represent the sellers of a home that includes the main house and, 30 feet away, the detached garage and a carriage house (a complete apartment) on top of the garage. The buyers per formed a termite inspection and found evidence of live termites with non-structural termite damage in the garage, but no evidence of termites at the main house. The wood-destroying insect report recom mended that the main house (where there was no evidence of termites) and the garage both be treat ed. The seller wants to treat the garage only and fix the damaged wood. The buyer wants the garage and the main house treated. Which is correct?

ANSWER: Paragraph 12 of the GCAAR Contract (GCAAR Form 1301), Wood-Destroying Insect Inspection, requires the seller to treat for live wood-destroying insects in dwellings and/or garages. If there is only a live infesta tion in the garage and/or carriage house, then that is the only area the seller is responsible to treat. It’s understand able that the buyer wants the main house treated, but it does not make the seller obligated to do so.

QUESTION: One of our agents had a broker’s open house in Bethesda today. A group of agents came and took videos inside the house. We don’t know how those videos might be used. None asked for permission to record, nor did they ask for consent from any agent or buyer who might inadvertently have been recorded. Plus, we almost always post a tour on MLS and our website, if the client consents in the listing agreement. This seems like an invasion of privacy, especially because this was a broker’s open house, not a public one. Were these agents right to do this?

ANSWER: The marketing authorizations in the listing agreement are ONLY for listing brokers. There is no right for cooperating or sub-agents to take videos or create any form of marketing above or beyond what the listing broker creates. As an invitee, the visiting agents’ authorities are limited. No cooperating or sub-agent should be taking videos or pictures of a property without the express consent of the owner.

DISCLAIMER: The answers provided here are the opinion of the authors, are for informational purposes, and are only for GCAAR members. Neither Counselors Title, LLC, nor Pardo & Drazin, LLC, is providing legal advice, but rather providing a general statement of law. No lawyer/client relationship is–or will be–established as a result of this material. Readers are encouraged to retain their own counsel for their specific questions. Answers may have been edited for formatting purposes.