Here is the latest news direct, hot off the presses in August Maine.
LEGAL SPOTLIGHT - BUSINESS DAYS
by MAR Legal Counsel. Questions have been asked recently on the hotline (by members) and to the Maine Real Estate Commission (by consumers and members) which are the subject of this Legal Spotlight. The questions revolve around the issue of business versus calendar days and the consequences of not understanding the difference. It appears that our members, for the most part, understand and apply the measure of business days to various time frames in the purchase and sale agreement. But perhaps the client/consumer has not been adequately informed, and in some cases, has been told that "it is the law" to use business days.
As a reminder, we have set the contract (several years ago) to use business days anywhere in it or any of the addenda, unless the particular clause specifically calls for calendar days (as an example, the seller disclosure about a septic system in a shoreland zone calls for information for the prior 180 calendar days, because that is what the state law requires). It is not the law to use business days, but rather a choice recommended by the contract review committee and adopted by the Maine Association of REALTORS Board of Directors, that it was preferable to do so. The reasons revolved around a desire to have business decisions and their consequences fall on business days rather than holidays and weekends. There are so many dates that have dire ramifications if missed in the typical purchase and sale agreement, that it was decided to have those dates expire on business days, rather than Sundays, or Thanksgiving, or Christmas or any of the other calendar holidays that occur. The dates which are considered holidays are set by the federal government or by the State of Maine and can be found on their website.
The concern here with consumers is that some of them are stating that they were told by their agent that it is legally required to use business days. That is not true. In fact, if a client wanted to change the way days are counted in their offer/counteroffer, they would simply use paragraph 26 to make a global change to calendar days from business days. To avoid misunderstandings, a communication between agents would be advisable to something so fundamental as when various deadlines expire. As a further note, the Commercial Purchase and Sale Agreement as put forth by the Maine Commercial Association of REALTORS uses calendar days rather than business days so for any members using that form who may be unaccustomed to doing so, be aware.
The nub of the complaints to the Maine Real Estate Commission is around the investigation paragraph of the Purchase and Sale Agreement (paragraph 12). The typical complainant is a buyer who feels that they should get their deposit back after raising questions about something discovered during the building inspection, when in fact they never voided the contract. The whole issue about business versus calendar days comes up upon questioning by the MREC examiner, and it becomes clear that the consumer didn't understand both the type of days being counted, or that they could have had it otherwise, and further didn't understand how the due diligence paragraph works. It is incumbent upon licensees to be sure that their clients understand the consequences of the clauses in the purchase and sale agreement, and any other contracts which their clients are signing, and that they are urged to get legal advice for anything they might have questions about.
So, as a reminder about paragraph 12 of the Purchase and Sale Agreement, using a General Building investigation as an example, if the buyer chooses to have one done with results reported to the Seller within 10 days (those are business days), it means that the buyer needs to get the results, analyze them, ask the seller for any modifications or an extension of time, and get satisfactory answers in writing from the Seller or void the contract in writing (the Investigation Contingency Amendment in Zipforms is set up for these purposes) all by 5 PM of the last business day. It is not enough to have told the seller there is a problem, either verbally or in writing. The large paragraph after the list of types of investigations states: "If the result of any investigation or other condition specified herein is unsatisfacory to Buyer in Buyer's sole discretion, and Buyer wishes to pursue rememdies other than voiding the Agreement, Buyer must do so to full resolution within the time period set forth above; otherwise this contingency is waived."
That means that if the buyer asks for a remedy or price concession, and the seller doesn't respond, the buyer must void in writing by 5 PM of the last business day, or the building inspection contingency is waived, and deemed satisfactory to the buyer, and if the buyer later tries to void based on the building inspection they may be considered to be in default and their deposit is at risk. This is the part that the MREC thinks buyers don't understand; they think if they just tell the seller there is a problem by the last business day of the inspection that they are protected to deal with the issue after the time frame has passed. This is not true. It is especially important that licensees make sure their clients understand this issue, since it is their deposit that is at risk if they don't handle it appropriately.
MAINE OPEN HOUSE WEEKEND: The winning Maine Open House Weekend listing is MLS #1020470 in Brunswick. Listing agent winner: Mikie Perry - $250 Visa gift card. Other prize winners: Debbie Andrews - $100 Hannaford gift card; and Rick Baribeau - $100 Staples gift card. Thanks to all for holding the 700 open houses throughout the state last weekend.
MAINE STATE HOUSING AUTHORITY: Nominated by the Governor for new Commissioners of the Maine State Housing Authority: John C. Turner (Chapter 7 bankruptcy trustee), Peter Anastos (developer), Lincoln J. Merrill, Jr. (insurance company CEO), and Donald F. Capoldo, Jr. (CEO Plant Nursing Home). Hearings were last week and final legislative vote will be September 27.
MAINE ASSOCIATION OF REALTORS - http://mainerealtors.com
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19 Community Drive, Augusta, ME 04330; Last issue: Sept. 22
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Last years annual statewide MAR meeting in Bar Harbor Maine....