Section 6. Advanced Contract Issues and Addenda Flashcards
In the event of a conflict between the Owners’ Association Disclosure Addendum and the Offer to Purchase and Contract:
a. The Owners’ Association Disclosure Addendum shall control
b. The Offer to Purchase and Contract shall control
c. The Offer to Purchase and Contract will be null and void
d. The Owners’ Association Disclosure Addendum will be null and void
a. The Owners’ Association Disclosure Addendum shall control
Except in the event that the conflict is in the description of the property or the identity of the buyer or seller, the Owners’ Association Disclosure Addendum shall control and conflict with the Offer to Purchase and Contract. (LO: Understand which forms to use is particular situations, like when the primary contract is terminated, short sales, New construction addendum, Buyer Possession Before Closing Agreement, Seller Possession After Closing Agreement, Lead-Based Paint Addendum, Additional Provisions Addendum, Owner’ Association Disclosure, Vacation Rental Addendum, and Condominium Resale Statement Addendum)
All of the following are necessary steps for completing an addendum in a contract EXCEPT:
a. Fill in all blanks with N/A where necessary
b. Seller and buyer should initial and date every change, addition, or deletion
c. Never rewrite the offer, just keep adding addenda and amendments
d. Review all contract provisions with parties and recommend legal advice
c. Never rewrite the offer, just keep adding addenda and amendments
Which of the following regarding the NC Free Trader Agreement is FALSE:
a. Document allows married people to purchase property separately
b. Document is generally used by divorced couples
c. Document is generally used by separated couples who are not yet divorced
d. Document eliminates marital claims by the other spouse
b. Document is generally used by divorced couples
In the event that the primary contract is terminated, and the Backup Contract Addendum 2A1-T is being used, all of the following are consequences EXCEPT:
a. The seller shall indemnify the buyer and hold the buyer harmless rom any and all claims, damages and costs
b. The buyer and seller agree that the buyer may not examine or otherwise have access to the primary contract without written permission from the seller and primary buyer
c. Buyer and seller agree that any initial earnest money deposit shall be deposited within 3 banking days following the effective date of this backup contract even while the backup contract is in secondary position
d. The seller does not need to provide evidence that the primary contract has become terminated and the backup contract has become primary
d. The seller does not need to provide evidence that the primary contract has become terminated and the backup contract has become primary
If the primary contract terminates, the seller must promptly give written notice that the backup contract is primary and provide proof of the termination of the primary contract. (LO: Understand which forms to use is particular situations, like when the primary contract is terminated, short sales, New construction addendum, Buyer Possession Before Closing Agreement, Seller Possession After Closing Agreement, Lead-Based Paint Addendum, Additional Provisions Addendum, Owner’ Association Disclosure, Vacation Rental Addendum, and Condominium Resale Statement Addendum)
What is the purpose of the Additional Provisions Addendum:
a. To warn potential buyers of lead-based paint in the property
b. To address provisions that are otherwise omitted from the Offer to Purchase and Contract
c. To permit the buyer to take possession of the property prior to closing
d. To permit the seller to retain possession after closing
b. To address provisions that are otherwise omitted from the Offer to Purchase and Contract
All of the following items are addressed on the Seller Possession After Closing Agreement EXCEPT:
a. Term of possession
b. Utilities and lawn maintenance
c. Rent
d. Transfer of deed
d. Transfer of deed
When is New Construction Addendum (2A3-T) used:
a. When the buyer owns the property
b. When the seller is a licensed contractor or has engaged a licensed contractor who has completed construction of a “spec” dwelling on the property
c. When construction of a “spec” dwelling is not yet completed
d. When extensive additional improvements are to be made on a “spec” dwelling or its appraisal is dependent on their value
b. When the seller is a licensed contractor or has engaged a licensed contractor who has completed construction of a “spec” dwelling on the property
2A3-T is used when the seller is a licensed contractor or has hired a licensed contractor who has completed construction of a “spec” dwelling on the property. If construction of the dwelling is not yet complete or if extensive additional improvements are needed or if appraisal is dependent on their value, use form 800-T. (LO: Understand which forms to use is particular situations, like when the primary contract is terminated, short sales, New construction addendum, Buyer Possession Before Closing Agreement, Seller Possession After Closing Agreement, Lead-Based Paint Addendum, Additional Provisions Addendum, Owner’ Association Disclosure, Vacation Rental Addendum, and Condominium Resale Statement Addendum)
All of the following items can be amended with the Agreement to Amend Contract EXCEPT:
a. Purchase price.
b. Buyer’s method of financing.
c. (Additional) Earnest money deposit date.
d. Building deposit.
b. Buyer’s method of financing.
The method in which the buyer is financing the purchase in not a relevant amendment on the Agreement to Amend Contract. (LO: Understand which forms to use is particular situations, like when the primary contract is terminated, short sales, New construction addendum, Buyer Possession Before Closing Agreement, Seller Possession After Closing Agreement, Lead-Based Paint Addendum, Additional Provisions Addendum, Owner’ Association Disclosure, Vacation Rental Addendum, and Condominium Resale Statement Addendum)
What is the difference between an amendment and an addendum:
a. An amendment adds additional terms to the contract
b. An addendum changes existing terms in the contract
c. An addendum changes existing terms in the contract while an amendment adds additional terms to the contract
d. An amendment changes or edits existing terms in the contract while an addendum adds additional terms to the contract
d. An amendment changes or edits existing terms in the contract while an addendum adds additional terms to the contract
What is the purpose of the Agreement to Amend Contract:
a. To make changes that the buyer and seller have previously agreed to on the Offer to Purchase and Contract
b. To make changes to the property that the buyer is buying
c. To make changes to the way the buyer is financing the purchase
d. To allow the seller to retain possession of the property after closing
a. To make changes that the buyer and seller have previously agreed to on the Offer to Purchase and Contract
The purpose of the Agreement to Amend Contract is to make agreeable changes to the terms of the Offer to Purchase and Contract. (LO: Understand which forms to use is particular situations, like when the primary contract is terminated, short sales, New construction addendum, Buyer Possession Before Closing Agreement, Seller Possession After Closing Agreement, Lead-Based Paint Addendum, Additional Provisions Addendum, Owner’ Association Disclosure, Vacation Rental Addendum, and Condominium Resale Statement Addendum)
What form is used under the condition that the primary contract is terminated:
a. The Backup Contract Addendum form 2A1-T
b. Agreement to amend contract form 4-T
c. Offer to purchase and contract 2-T
d. Additional Provisions Addendum 2A11-T
a. The Backup Contract Addendum form 2A1-T
Which of the following regarding signatures is FALSE:
a. All co-owners must sign the contract
b. Identify people by their individual legal names
c. Using abbreviated names is acceptable
d. Use the full legal name of all entities
c. Using abbreviated names is acceptable
All of the following items are addressed in the Buyer Possession Before Closing Agreement EXCEPT:
a. Term of possession
b. Agreed Upon Repairs And/Or Improvements
c. Buyer’s Waiver and Acceptance of Property Condition
d. Insurance on Buyer’s Property
b. Agreed Upon Repairs And/Or Improvements
All of the following items are addressed on the Seller Possession After Closing Agreement EXCEPT:
a. Pets
b. Eviction
c. Insurance
d. Septic system installation/ maintenance
d. Septic system installation/ maintenance
The purpose of the Owners’ Association Disclosure Addendum is to:
a. Establish an owners’ association
b. Relay to the buyer the fees and responsibilities associated with the owners’ association
c. Relieve the buyer from owners’ association fees
d. Create new amenities in an owners’ association
b. Relay to the buyer the fees and responsibilities associated with the owners’ association
In the event that the Due Diligence Request and Agreement results in any adjustments in the condition of the property, which of the following is FALSE:
a. The seller shall notify the buyer upon completion of the adjustments
b. The seller shall provide the buyer with documentation of the completion of the adjustments
c. The seller is required to hire a contractor to make the adjustments
d. The buyer shall have the right to verify that the adjustments have been completed in a good and workmanlike manner
c. The seller is required to hire a contractor to make the adjustments
When are spousal signatures in marital life estates required in sales contracts:
a. Never
b. Only required with ownership in severalty
c. Always required unless with ownership in severalty
d. Always required even with ownership in severalty
d. Always required even with ownership in severalty
When utilizing power of attorney forms, which of the following is FALSE:
a. Used for incapacity of a party
b. Used for inability of a party
c. Special power of attorney form is usually required
d. Signor is an attorney-in-fact
a. Used for incapacity of a party
Power of attorney is not used for a party who is incapable to sign, it is used for a party who is unable to sign. (LO: Explain why certain types of signatures are appropriate and some are inappropriate, spousal signatures, who uses the NC Free Trader Agreement, and how to utilize power of attorney forms)
What is the purpose of the Seller Possession After Closing Agreement Form (2A8-T):
a. Allows seller to retain possession for a period of time after closing
b. Allows buyer to take possession of the property prior to closing
c. Allows the seller long term occupancy after closing
d. Is treated as a residential lease for the buyer and seller
a. Allows seller to retain possession for a period of time after closing
Which of the following regarding lead-based paint is FALSE:
a. All lead-based paint is a hazard, even intact paint that is in good condition
b. The buyer should receive a copy of the Protect Your Family from Lead in Your Home pamphlet.
c. Any residential dwelling built prior to 1978 may present exposure to lead from lead-based paint
d. Lead poisoning may produce neurological damage, learning disabilities, behavioral problems, impaired memory, and even death.
a. All lead-based paint is a hazard, even intact paint that is in good condition
Intact lead-based paint that is in good condition is not always a hazard, see the Protect Your Family from Lead in Your Home pamphlet. (LO: Understand which forms to use is particular situations, like when the primary contract is terminated, short sales, New construction addendum, Buyer Possession Before Closing Agreement, Seller Possession After Closing Agreement, Lead-Based Paint Addendum, Additional Provisions Addendum, Owner’ Association Disclosure, Vacation Rental Addendum, and Condominium Resale Statement Addendum)
All of the following items can be amended with the Agreement to Amend Contract EXCEPT:
a. Settlement date
b. Expenses
c. Purchase price
d. Buyer’s right to take possession prior to closing
d. Buyer’s right to take possession prior to closing
The buyers right to take possession prior to closing requires the Buyer Possession Before Closing Agreement, not the Agreement to Amend Contract. (LO: Understand which forms to use is particular situations, like when the primary contract is terminated, short sales, New construction addendum, Buyer Possession Before Closing Agreement, Seller Possession After Closing Agreement, Lead-Based Paint Addendum, Additional Provisions Addendum, Owner’ Association Disclosure, Vacation Rental Addendum, and Condominium Resale Statement Addendum)
When is it NOT appropriate to use the Owners’ Association Disclosure Addendum (2A12-T):
a. New Construction
b. Developed residential property that requires a Residential Property and Owners’ Association Disclosure Statement
c. Land
d. Vacant lots
b. Developed residential property that requires a Residential Property and Owners’ Association Disclosure Statement
For developed residential property that requires a Residential Property and Owners’ Association Disclosure Statement, form 2A12-T is not appropriate. (LO: Understand which forms to use is particular situations, like when the primary contract is terminated, short sales, New construction addendum, Buyer Possession Before Closing Agreement, Seller Possession After Closing Agreement, Lead-Based Paint Addendum, Additional Provisions Addendum, Owner’ Association Disclosure, Vacation Rental Addendum, and Condominium Resale Statement Addendum)
What is the difference between an amendment and an addendum:
a. An amendment adds additional terms to the contract
b. An addendum changes existing terms in the contract
c. An addendum changes existing terms in the contract while an amendment adds additional terms to the contract
d. An amendment changes or edits existing terms in the contract while an addendum adds additional terms to the contract
d. An amendment changes or edits existing terms in the contract while an addendum adds additional terms to the contract
Addenda add terms to a contract, while Amendments change existing terms to a contract. (LO: Analyze the issues and challenges posed by drafting contracts, amendments and addenda, and guidelines for completing an addendum)
Which of the following provisions is NOT included on the Additional Provisions Addendum (2A11-T):
a. Septic System Installation/Modification
b. Agreed-Upon Repairs And/Or Improvements
c. Rental/Income/Investment Property
d. Rental/Income/Investment Property for vacation rentals is North Carolina
d. Rental/Income/Investment Property for vacation rentals is North Carolina
2A11-T should not be used for vacation rentals in North Carolina. Instead, use a Vacation Rental Addendum. (LO: Understand which forms to use is particular situations, like when the primary contract is terminated, short sales, New construction addendum, Buyer Possession Before Closing Agreement, Seller Possession After Closing Agreement, Lead-Based Paint Addendum, Additional Provisions Addendum, Owner’ Association Disclosure, Vacation Rental Addendum, and Condominium Resale Statement Addendum)
