Must-Know Forms Changes for 2024

BY JOHN WAIT General Counsel

Even before the Burnett antitrust settlement was announced on the Ides of March, 1 it had been a very, very busy forms cycle. Forms changes represent eight months of hard work by our Forms Committee members and NC REALTORS® staff.

The chair of the Forms Committee, Jennifer Frontera, did an excellent job and worked very well with Bob Ramseur, chair of the Joint Forms Task Force. Leigh Morgan somehow kept me organized on the staff side. There were also volunteers that did awesome work in task forces that addressed commercial, property management, and auction forms.

We thought we were done after our last meetings in early March . . . and then suddenly we were not. The forms meetings between March 15th and April 10th to address the settlement were tense but productive, gut-wrenching and solution-oriented. Like all of you, we were very anxious about the announced changes, but we also felt a heavy burden to make sure that members had the tools they needed to address a new landscape.

The Forms Committee did an outstanding job with the limited information it had at the time, but all the forms volunteers know that this year will be an entire year of unpacking how members navigate the new MLS rules and proposing solutions. While that process continues, I would be amiss if I did not take a minute and highlight the work that was done this past cycle.

So, in case you have not taken a gander yet, here are some must-know forms changes for 2024.

1I mean, really? Can anyone tell me if this was intentional?!

1.

Form 2-T – Residential Offer to Purchase and Contract Language has been added to permit the buyer to pay the Due Diligence Fee to another party at the seller or listing agent’s direction, and the Due Diligence Period paragraph now has checkbox options where agents can either pick a date certain or choose a certain number of days to be counted from the Effective Date. Language has also been added to give the buyer and the closing attorney more power to make sure the seller gives information about their HOA account to limit surprises at Closing.

5.

NEW Form 170 – Closing Guidelines for Seller. These new guidelines provide a simple, one page list of common items sellers need to complete as part of closing. This form will make it easier for listing agents to explain what their clients must do, and will hopefully make the move out transition easier to understand.

2.

Form 4-T – Agreement to Amend Contract. A checkbox has been added so that a buyer can easily be added to the purchase contract by amendment!

3.

NEW Form 10-T – Estate Property Flowchart . Have you ever wondered who should sign the paperwork for estate property? Well, wonder no more! This flowchart will help you identify, even at the agency contract stage, who needs to sign documents when it comes to estate properties. But still, do not fail to consult with your BIC and an estate attorney during the process.

6. RE-DRAFT Form 220 – Cooperating Compensation Agreement. This form was formerly titled “Confirmation of Compensation, Agency, and Appointment.” It has been renamed and completely re-drafted to help agents’ who are navigating new MLS rules and Code of Ethics changes. This form now helps facilitate a contract for cooperating compensation between the selling firm, i.e., the buyer’s agent, and either the seller or the listing firm.

4.

NEW Form 142 – Vacant Land Disclosure Statement. This new form has been created to allow the seller to make disclosures regarding vacant land. This disclosure is required by new, added language in Form 12-T, the Offer to Purchase and Contract –Vacant Lot/Land. The seller has the right to make no representation if they wish, just like the RPOADS and MOG disclosures required by the Residential Property Disclosure Act. If the seller does not provide this form as required by Form 12-T, then the buyer will have a limited three-day right to terminate and receive a refund of their Due Diligence Fee, if any.

7. MAJOR EDITS Form 800-T – Offer to Purchase and Contract – New Construction. This new version of Form 800-T was created by a task force over the course of many months with input from REALTORS® and closing attorneys. The old version was difficult to navigate and did not reflect how new construction transactions unfold in practice. These edits, collectively, will make this form much easier to use and understand. Major edits to this form include: a. Building Deposits eliminated and replaced with Construction Fees; b. Mandatory detailed plans and specifications are itemized and must be attached to the form to make sure the scope of the build is clear; c. A mechanism for Construction Fees to be refunded if there is a material breach of contract by the seller; d. Standard triggering events for when Construction Fees must be paid; e. A requirement that any significant deviation from the Plans and Specifications must be agreed to in writing via a Change Order; and f. Deadlines built into each phase of construction so that builders cannot indefinitely delay Closing due to either alleged or actual delays.

8.

NEW Form 416 – Tenant Personal Property Flowchart. The statutes that govern tenant personal property are extremely confusing and are strewn about Chapter 42 of North Carolina’s General Statutes in no discernable order. This chart will be extremely helpful to property managers who must navigate these statutes every day and face stiff penalties if they fail to follow the law as written, unwieldly as it is.

9.

NEW Form 417 – Landlord-Tenant Normal Wear and Tear Guide. The issue as to what is ordinary wear and tear to a rental property has, up to now, been an aggravating gray area for agents, landlords, and tenants. This guide is not the law, but it will be a helpful and important step toward managing expectations for all parties involved in the tenancy.

10. Form 620-T – Real Property Auction Purchase and Sale Contract. This contract has been restructured to make sure all material contractual terms are on the first page rather than scattered through the first several pages. It has also been edited to more closely resemble Form 2-T.

Full forms change summaries are available in the Q&A section of ncrealtors.org. Though not discussed in detail here, all the standard form agency agreements have been revised to comply with the terms of the antitrust settlement. The biggest changes, of course, are to the residential buyer agency agreements, Forms 201 and 203. However, agents who use the commercial and auction agency forms should also review the changes made to those agency agreements.

I’d like to thank every REALTOR®, staff member, and NC Bar Association attorney who worked on these forms changes for their dedication and thoughtful contribution. I have always believed that the forms speak to REALTOR® values and should be a source of pride. As someone who works regularly with forms from other states, I have a deep appreciation for the years of work that have made our forms what they are today, and I believe these most recent changes will continue to make our forms some of the best in the country.