In Massachusetts, the standard form Greater Boston Real Estate Board or Mass. Association of Realtors Standard Form Purchase and Sale Agreement (“P&S”) is almost always the governing contract between the Buyer and the Seller regarding the proposed property to purchase. Most Buyers submit an initial Offer to Purchase to a Seller, which spells out the terms of the contract. The P&S supersedes the offer, and can be thought of as the “long form” contract.
At first blush, the purchase and sale agreement, like most legal documents, can be difficult to read and comprehend. The best way to understand it is to divide the document into several sections.
First, like all contracts, the purchase and sale agreement sets out the terms of the deal. These terms primarily are taken from the offer. This includes the names of the parties, the legal description of the property (taken from the current deed), the purchase price, the mortgage commitment date, the closing date, any Seller credits, and any agreed upon fixtures that will remain with the property or be taken by the Seller.
Second, the purchase and sale agreement deals with the title to the property and the deed. It lays out the framework for a conveyance (a real estate transfer) in Massachusetts. The agreement spells out that the Seller conveys the deed to the Buyer in return for consideration, then the deed is recorded and the Buyer becomes the owner of the property. However, in Massachusetts, once the deed is recorded at the proper Registry of Deeds, then any title issues “run with the land.” Thus, the new owner becomes responsible for any outstanding encumbrances or liens that were not properly discharged. In order to protect the Buyer, the purchase and sale agreement provides that the Seller must convey “good, clear and marketable” title. Acting as the buyer’s or lender’s counsel, or both, TitleHub attorneys will review the title exam and work with the Seller’s attorney to clear any title issues, so that the buyer will receive a certification of title and an owner’s title insurance policy.
Third, the purchase and sale agreement lays out the responsibilities of the Seller. This includes maintaining insurance and upkeep on the property until closing, obtaining a smoke and carbon monoxide certificate at closing, paying the broker’s commission, obtaining a 6(d) certificate for a condominium, and requiring that the taxes be paid by Seller up until the closing date (through an adjustment to the HUD Settlement Statement). The agreement also provides that the Seller’s agent (either the realtor or the attorney) holds the buyer’s deposit in an escrow account.
There is a note of caution about the standard form Massachusetts purchase and sale agreement. We like to say that it is anything but “standard.” The standard form provides several hidden advantages to a Seller. Thus, buyers must have an experienced attorney revise the agreement and flag those built in deficiencies. For example, if a Buyer were to default prior to closing, the standard form document provides no cap on the damages; a skilled attorney will know to cap the damages at the deposit. The same is true if a buyer loses his rate lock if there is a delay of the closing; a skilled attorney would use langauge to protect the buyer in this situation.
An experienced attorney will produce a Rider to the purchase and sale agreement that will have language that protects a Buyer’s deposit and provides an aggressive layer of due diligence. For example, if the Buyer is purchasing a condominium, the Rider should have the Seller make representations that the association is not contemplating any special assessments, there are no pending lawsuits against the association, and the budget is in good order. Other issues include seller repairs, septic system/Title V compliance, radon gas, UFFI insulation, lead paint, and buyers’ access to the property while it is under agreement.
If you have any questions on the purchase and sale agreement or your transaction in general, please contact Attorney Richard Vetstein at [email protected] or 508-620-5352.
Richard D. Vetstein, Esq. is regarded as one of the leading real estate attorneys in Massachusetts. With over 25 years in practice, he is a four time winner of the "Top Lawyer" award by Boston Magazine, a "Super Lawyer" designation from Thompson/West, and "Best of Metrowest." For Rich's professional biography, click here. If you are interested in hiring Rich or have a legal question, email or call him at [email protected] or 508-620-5352. 
A Counterfeit South Carolina Driver’s License, Forged Deed, and a UPS Store In Philadelphia: The Anatomy Of A Title Theft Scam
Sep 12th, 2024 FBI Investigation: Scam Artists Make Off With Nearly $500,000 In Sale Proceeds; Local Real Estate A [. ]
Massachusetts Eviction Record Sealing Bill Signed Into Law
Aug 7th, 2024 Tenants Given Presumptive Right to Seal Certain Eviction Records; Strict Rules Imposed On Credi [. ]
A Ticking Time Bomb: HOA Covenants Across Massachusetts May Have Silently Expired
Jul 13th, 2024 Hundreds of Massachusetts Homeowner's Association (HOA) Covenants, Conditions and Restrictions [. ]
The Massachusetts Lis Pendens: The Definitive Guide For Lawyers and Clients
Jan 21st, 2024 A Massachusetts Real Estate Litigator Talks About Lis Pendens Basics, Strategy, and Pro Tips. [. ]
Tenant Rental Assistance Eviction Protection (Chapter 257) Re-enacted By Legislature and Gov. Healey
Sep 8th, 2023 Non-payment Evictions Put On Hold Until Tenant RAFT Applications Are Denied/Approved Ignorin [. ]
Housing Court To Speed Up Eviction Cases and Shift To More In-Person Events
Apr 3rd, 2023 New Rules Aimed At Reducing Pandemic Era Case Backlogs and Delays Are the old days of packed [. ]
Boston Rent Control Bill Will Wreak Havoc In City’s Housing Market
Mar 9th, 2023 Wu Administration Misled Public On Details Of Plan: Corrupt Local Rent Control Boards Can Override [. ]
