The GCAAR Regional Sales Contract was significantly revised in September 2006. Although it is not the form primarily used in Frederick County, it is a Contract preferred by Realtors in Washington, D. C., Virginia and in some parts of Montgomery and Prince Georges’ Counties, MD. Agents should understand the basic differences and issues presented by the Regional Sales Contract if offers are presented on local listings by agents using the GCAAR form.

Interestingly, in the financing aspects of the contract, there are many provisions relating to assumption of financing, including a specific paragraph (3.C) dealing exclusively with loan assumptions. Since so few loans are now assumable without buyer qualification, it seems to be a pointless provision.

The Deposit paragraph (4.) not only no longer acknowledges receipt of the deposit, but it also gives the option of using a promissory note as a deposit. It is a mistake to even suggest the use of such an illusory form of securing performance. Additionally, the Contract provides that the deposit will not be placed in escrow until after the date of ratification. Although the deposit may be placed in an interest bearing account, the buyer waives the right to interest earned, which will thus go to the party holding the deposit.

Note that Paragraph 7, regarding property condition, provides that the systems and appliances will be in “normal working order” as opposed to the language of the MAR contract which simply calls for “working condition”. The GCAAR standard of “normal” working order is a much higher standard. A system or appliance may be adequate within the terms of the MAR contract if it barely performs the function for which it is intended, as long as it is operational. However, it may not be in compliance with the higher standard of the GCAAR Contract because it is not working “normally”.

Paragraph 8 of the GCAAR Contract regarding Utilities has an acknowledgement that the property is on a private septic system, and also it required designation of the number of bedrooms for which the septic system is approved. This provision should help avoid controversy when the purchaser is intending to enlarge or improve the property, since they should be given disclosure of the number of bedrooms that are approved for the system.

In the portion of the Contract describing the property and fixtures to convey (Paragraph 9.), the language is confusing because it fails to identify that the listed items only convey if currently installed on the property. The Contract does refer to “existing” personal property and fixtures, apparently in an inarticulate attempt to point out that if the item is not installed on the property at the time of Contract Ratification, it is not the Seller’s intent to provide such an item. Thus, if there is no sump pump or exhaust fans, presumably the Seller is not required to install them, although the Contract language is vague. Also, the Contract does provide a section for the Seller to list items that convey without warranty as to their condition, in other words, as is.

It must be considered that the GCAAR Contract requires the use of a Jurisdictional Addendum. Without such addendum, there are no provisions for time being of the essence, no notice provisions, and many of the statutory requirements of Maryland Law are absent.

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