This week, the Cincinnati Area Board of Realtors addressed a topic on which I have written previously: The proper form to use to terminate a real estate contract pursuant to the failure of a contingency such as inspection or financing contingency. Their blog entry and this one address termination of the form Cincinnati Area Board of Realtors residential purchase contract.
Cindy Henninger, director of Professional Services of the Board wrote this blog entry about the use of a “Notice of Termination,” which is a one-party notice from the buyer to the seller to exercise a contingency and terminate a contract. No seller signature is required for it to become effective. The other form available from the Board and commonly in use in the greater Cincinnati/Dayton marketplaces is a “Mutual Release,” which is not appropriate for use when the buyer is simply exercising his unilateral right to terminate.
Here’s why: The Release form requires the seller’s signature and therefor his consent. And if the seller refuses his consent, there could be an issue that the buyer did not in fact terminate (but simply rather proposed termination). Then, if the time period lapses for termination pursuant to a financing or inspection contingency while awaiting the seller’s signature, the seller then may say “too late.” I know because a seller tried this on me once.
I wrote on this topic previously, here.
Realtors would be advised to familiarize themselves with the proper form to use. Otherwise, you may find your self in a “what the heck?” moment of lawyerly interpretation over the use of the wrong form, even though everyone knows what you in fact intended.