ADDENDUMS 

Each year contracts fall apart because either a listing agent or a selling agent failed to keep a contract in full force and effect by failing to get an appropriate addendum signed.  There are a number of situations where a timely addendum can make the difference between a transaction going to settlement or falling apart.  Let’s look at some examples:

Mortgage Commitment – A mortgage commitment is due by a certain date.  You call the mortgage company and they assure you the commitment will be in your hands by the due date.  So you tend to forget about it until the listing agent calls a day or so after the commitment date and asks, “where’s the commitment?”  You have just put your buyer at risk because in Sussex County our contracts have a Time-Is-Of-The-Essence clause which means all dates MUST be met unless a written addendum has been signed by all parties.

Home Inspection Dates – As a result of a home inspection being done, both buyer and seller have options open to them, and dates are attached to each one of these options.  For instance, a home inspection might state that a buyer must notify the seller within 3 days of the home inspection what repairs he wants to the seller to make.  A seller may take a position that if he doesn’t receive this request for repairs or an addendum extending the date for the request for repairs that he is no longer responsible for making said repairs.

Review of HOA or Condominium Documents – When a contract is contingent upon review of HOA or Condo documents within a specified date, or contains a DUCIOA Addendum, it would be wise to prepare an addendum in which the buyer acknowledges that he has received and read the documents, that he approves of same, and that he removes that contingency from the contract.  If a DUCIOA Addendum is part of your contract, then the buyer should sign the Resale Certificate to indicate acceptance of all the documents within the required time.

Settlement Date – You may have an occasion where the buyer finds it impossible to get to settlement as per the contract date.  Prepare an addendum asking for an extension of time for settlement.

Other Addendums

• Possession Before Settlement
• Possession After Settlement
• 1031 Exchange
• Rezoning
• Special Financing
• Clauses of the original contract that need to be changed
• Must Sell
• Property Must Appraise

The most important thing to remember on addendums is to get them signed in a timely manner.  Mark your calendar a couple of days in advance of the required date; don’t wait until the actual date something is due to get an addendum signed.  Failure to adhere to the dates specified in a contract puts your client at risk.  Doing a good job and paying attention to our ratified contract will get us all to the settlement table.  And that’s the ultimate goal!

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