5 Common Questions About FR/BAR Contracts

ORLANDO, Fla. – Here’s a short quiz to test your contract knowledge.

Following are a few common questions we get about the FR/BAR contract on the Florida Realtors® Legal Hotline. Any contract language cited below comes from the most recent version of the FR/BAR contracts, which are dated August 2024. Note that everything covered below exists in both the inspection and repair and the “As Is” versions of the contract.

1. When using the FR/BAR contract, the loan approval provided by the buyer can’t contain any conditions. True or False?

Answer: False

Paragraph 8 of either FR/BAR contract provides that a “Loan Approval” is “approval of a loan meeting the Financing and Appraisal terms of Paragraph 8(b)(1) and (2), above.”

“Appraisal” is defined as “Buyer’s mortgage broker or lender having received an appraisal or alternative valuation of the Property satisfactory to lender, if either is required by lender, which is sufficient to meet the terms required for lender to provide Financing for Buyer and proceed to Closing.” The word “Financing” only covers the amount of the loan, type of loan, and interest rate cap but doesn’t mention what, if anything, must be in the loan approval or loan commitment.

However, there is a clue that the drafters expect approvals to have conditions, as a buyer can back out of a contract even after delivering notice that they received Loan Approval if “Property related conditions of the Loan Approval (specifically excluding the Appraisal valuation) have not been met…” (see Section 8(b)(vi)).

2. Adding an amendment to a signed contract will change the effective date. True or False?

Answer: False

If the parties have an executed contract, adding an amendment later in the transaction (even if it’s a very short time after it was signed) does not change the effective date unless that amendment specifically provides that the parties agree to change the effective date.

3. A seller can withdraw a counteroffer prior to the buyer accepting it even when the buyer said they agree to the terms and will sign soon. True or False?

Answer: True

Either party can withdraw an offer or counteroffer prior to the time the other side signs or initials and returns a fully executed copy. Under the Statute of Frauds, certain types of contracts must be in writing and signed to be enforceable. One type of contract subject to  this rule is a contract for the sale of real property.

4. The MLS listing shows that a washer and dryer are in the property. The buyer submits an offer on a FR/BAR contract, which is accepted by the seller. The contract doesn’t include the washer and dryer in the part of section 1(d) that begins “Other Personal Property items included in this purchase are:                               .” When doing a walk through on the day of closing, the buyer notices that the seller has removed both the washer and dryer and gets upset. What is the buyer’s most likely remedy?

1. Sue the seller for breaching the contract since the seller took those items from the property.
2. The seller will have to credit the buyer an amount equal to or higher than the price of the washer and dryer removed from the property.
3. Nothing, as the MLS listing isn’t part of the contract, and the buyer failed to include the washer and dryer as part of the offer.
4. The seller must put the washer and dryer back before closing.

Answer: (c)

When using a FR/BAR contract, there are several pre-printed personal property items listed in section 1(d). However, the washer and dryer aren’t among them. Therefore, the buyer would need to add the washer and dryer to the blank line in 8(d) to make them part of the contract.

5. The real property under contract is subject to a mandatory homeowner’s association. A few days before closing, the buyer is trying to cancel the contract because the seller never delivered any of the association’s governing documents. Can the buyer cancel the contract for this reason?

Answer: No.

While a list of association documents is required to be provided by a seller of a condominium, the same is not true when the property is subject to a homeowner’s association.

That said, a buyer is entitled to receive a summary disclosure per Florida Statute 720.401, which includes information about assessments the homeowner’s association charges and some basic information about HOAs. This summary disclosure is part A of the FR/BAR rider titled Homeowners’ Association/Community Disclosure.

Joel Maxson is Associate General Counsel

Note: Information deemed accurate on date of publication

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