Protecting Massachusetts Real Estate Purchasers--There are Some Provisions in the "Standard" Greater Boston Real Estate Board Purchase and Sale Agreement which need "FIXING"

As a Massachusetts real estate attorneyey, I review purchase and sale agreements nearly every day of my life. This is what lawyers do in Massachusetts when they practice real estate law. Lately, more of my colleagues have developed their own "Word" documents which contain revised and updated approaches to pending transactions. There are still many deals, however, where the Realtor, or perhaps even the real estate attorney who is involved, trots out the 1991 vintage "standard" purchase and sale agreement and either submits that to me for review, or, worse, tells the Buyer to sign because it is "standard" and there really is no need to pay an attorney to review and revise the document.

This post is written as a result of the latter situation, which has developed into a "trap for the unwary" for my client. She signed the "standard" purchase and sale agreement, allegedly because that is what she was advised to do by the Realtor involved. In any event, one of the provisions in the "standard" agreement provides alternative courses for a Seller, in the Buyer defaults and does not close.

One choice is to retain the deposit placed into escrow as liquidated damages, which can be a rather significant financial "hit" for the Buyer. The other much more significant option is to permit the Seller to sue for specific performance. In a shaky market, the results of a judgment for specific performance can be a disaster, since the current value of the property may be much less than the contract price.

In my almost 42 years of practing real eestate law, I have never, ever permitted a purchasing client of mine to sign a purchase and sale agreement which has a "specific performane" provision. At times, this has meant almost killing the deal, but I feel so strongly opposed to this provision, that the attorney or Realtor on the other side has acceded to my demands.

The alternative to removal has placed my client in extremely hot water. She is being sued for specific performance on a transaction she needed to walk away from, mainly from a change in her financial position. It seems her 5% deposit for taking the property off the market for slightly more than two months is not sufficient for the Seller. I may be able to help her here, but in any event, this transaction will cost her an exceedingly large amount of extra money.

My point here is that while it is great to have the benefit of experienced counsel, our industry needs to update, on an even handed basis, a document that is almost twenty (20) years old. When this document was last revised, my rising senior in college was two years old. Computers were just coming into wholesale use, and there was no social networking. I am not sure with what diligence your local real estate board approaches revision of its "standard" documents. We, in Massachusetts, need some attention paid to ours, and quickly.