Use of Mandatory Purchase Agreements

Question:

I represent sellers of a home.  I received an offer on the home from the agent of a potential buyer, but the offer is on a document prepared by the buyer (who is an attorney) and not on the Agreement approved by the Louisiana Real Estate Commission.  What should I do?

Answer/Recommendation:

Attorneys can be difficult, can’t they?!!

In all seriousness, since we are dealing with a residential real estate transaction in Louisiana, the parties should be using the Louisiana Residential Agreement to Buy or Sell promulgated by the Louisiana Real Estate Commission.

According to the Louisiana Real Estate Commission Rules and Regulations, Chapter 39 “Presentation of Offers and Counter Offers,” Section 3900 entitled “Purchase Agreement Forms”:

A. The purchase agreement form used by licensees representing the buyer or seller in a residential real estate transaction shall be the Residential Agreement to Buy or Sell, or any successor thereof, prescribed by the Louisiana Real Estate Commission.

B. The Residential Agreement to Buy or Sell, or any successor thereof, shall be used in accordance with the provisions of R.S. 37:1449.1.

C. The official source of the prescribed purchase agreement form shall be the Louisiana Real Estate Commission website.

 

The word “shall” indicates use of the Louisiana Residential Agreement to Buy or Sell promulgated by the Louisiana Real Estate Commission is mandatory (as opposed to merely recommended) in all residential transactions where real estate agents represent the buyer or seller.

It’s good public policy to have as much consistency in residential transactions as possible.  Consistency in the use of the same Purchase Agreement allows for less opportunity for one side to “pull a fast one” on the other side by a quick change of language.  So, the requirement by the LREC to use a particular form when dealing in residential transactions is a good one.

(As a quick side note:  please recognize the LREC does not require this form be used for commercial transactions.  Commercial transactions will have their own forms).

Based on the foregoing, it is recommended you contact the buyer’s agent and request the buyer re-submit the offer on the approved Residential Agreement to Buy or Sell form promulgated by the LREC.

If the buyer refuses to use the Standard Purchase Agreement, then the following things can be done:

  1. Advise your clients that there could be potential problems associated with using the buyer’s form and recommend your clients have an attorney review all offers/counter-offers/addendums generated by the buyers;
  2. Document your file that you recommended buyers use the Standard Purchase Agreement form (which they refused) and that you recommended your clients have all documents reviewed by an attorney.

 

For any questions concerning this email, please contact me at rye@tutentitle.com.

H.L. “Rye” Tuten, III, is a Title Attorney/Real Estate Closing Attorney and Owner of Tuten Title & Escrow, LLC. Formerly assigned by RICE Insurance to defend real estate agents throughout Acadiana, much of his more than nine years’ litigation experience is with real estate concerns.

The information contained herein is simply for informational purposes only and not intended to provide legal advice or create an attorney-client relationship.