When you enter into a Purchase and Sales Agreement, you will be asked to provide a deposit that will be held in the listing brokers escrow account.  The handling of this deposit is governed by the following language in the agreement:

5. Deposits: All deposits shall be held in an escrow account by the Listing Brokerage Firm named in Section 17, unless mutually agreed otherwise in writing by Buyer and Seller, and applied to the Purchase Price, except as otherwise provided.

(a) The release of all deposits shall be upon execution of a written release by Buyer and Seller or as otherwise provided in Commercial Licensing Regulation 11.

(b) In the event of a dispute between Seller and Buyer as to the performance of any provision of this Agreement, the holder of the deposits shall transfer the deposits to the General Treasurer of Rhode Island after 180 days from the date of the original deposit, in accordance with the above regulation.

 Your deposit is at risk, if you decide to walk away from this purchase, unless you get a letter of denial from your lender by the date noted in section 7 under Mortgage Contingency:

 7. Mortgage Contingency: This Agreement is subject to Buyer obtaining a commitment letter issued by an institutional mortgage lender or mortgage broker ("Lender") on or before........................, ("Mortgage Contingency Date") under the following terms: an amount not to exceed $.................................. at an initial rate of interest not to exceed .................................... % per year, for a term of at least ........ years, with a maximum of ....................................... points. Buyer authorizes Seller and/or Listing Licensee to contact any such Lender(s) to confirm the status of Buyer's application.

(a) Satisfaction of Contingency: This Contingency is deemed satisfied once Buyer presents a commitment letter to Seller or Listing Licensee in accordance with Section 17. Buyer assumes all obligations in fulfilling any and all conditions of the commitment letter.

(b) Denial of Mortgage: If Buyer applies for a mortgage as described above and receives a written denial for such mortgage, then, upon providing a copy of the denial to Seller or Listing Licensee in accordance with Section 17 on or before the Mortgage Contingency Date or extensions, this Agreement shall be declared null and void and Buyer shall have the right to the Deposits in accordance with Section 5 unless Buyer waives the mortgage contingency in writing.

(c) Extension: If Buyer has received neither a commitment nor a denial for such mortgage on or before the Mortgage Contingency Date, Buyer may request, on or before the Mortgage Contingency Date, and by written notice to Seller or Listing Licensee in accordance with Section 17, to extend the time by which a copy of the written commitment or denial must be provided, or waive the Mortgage Contingency by written notice in accordance with Section 17. In response to Buyer's request, Seller may, on or before the Mortgage Contingency Date, and by written agreement with Buyer, extend the time by which a copy of the written denial must be provided. If Seller does not extend the Mortgage Contingency Date, this Agreement shall be null and void and Buyer shall have the right to the Deposits in accordance with Section 5 unless Buyer waives the Mortgage Contingency in writing.

Alternatively, you may be released from the Purchase and Sale Agreement if you have

A. Conducted inspections, within 10 calendar days of the date of the agreement, as agreed upon in Section 15, and found any existing, substantial/materially deficient condition which has not been disclosed to Buyer prior to the execution of the Agreement. 

B. Notified the Seller in writing within seven (7) days of receipt of the inspection report that you wish to be released as a result of existing, substantial/materially deficient condition which has not been disclosed to Buyer prior to the execution of the Agreement.

 15. Inspections Contingency: Notwithstanding anything to the contrary in Section 12 of this Agreement, Buyer may, at Buyer’s expense, choose to have any or all of the following inspections conducted as part of this Sales Agreement. Buyer shall have ten (10) calendar days from the date of this Agreement to conduct these inspections (“Inspection Period”) or this contingency shall be deemed to be waived. If there is a delay in the receipt of the inspection report due solely to the inability of the inspector to complete the inspection, the Inspection Period shall be

extended for a reasonable time, not to exceed seven (7) calendar days. If requested, the inspector shall provide Buyer with an explanation of the delay which shall be made available to Seller.

(1) Radon Gas: Radon has been determined to exist in the State of Rhode Island. Testing for the presence of radon in residential real estate prior to purchase is advisable.

(2) Lead Contamination: “Every Purchaser of any interest in residential real property on which a residential dwelling was built prior to 1978 is notified that such property may present exposure to lead from lead-based paint that may place young children at risk of developing lead poisoning. Lead poisoning in young children may produce permanent neurological damage, including learning disabilities, reduced Intelligence Quotient, behavioral problems, and impaired memory. Lead poisoning also poses a particular risk to pregnant women. The Seller of any interest in residential real property is required to provide the Buyer with any information on lead-based paint hazards from risk assessments or inspections in the Seller’s possession and notify the Buyer of any known lead-based paint hazards. A risk assessment or

inspection for possible lead-based paint hazards is recommended prior to purchase.” R.I.G.L. § 5-20.8-11 gives Buyers the right to conduct a lead inspection.

(3) Private Well Water: R.I.G.L. § 5-20.8-12 gives Buyers the right to test the water quality of a private well in accordance with RI Department of Health regulations.

(4) Cesspool Inspection: R.I.G.L. § 5-20.8-13 gives Buyers the right to test a cesspool.

INSPECTIONS TO BE CONDUCTED:         


 YES  NO
Pest Infestation ____ ____
 
Wetlands ____
____  
Physical/Mechanical ____
____
 
Septic System ____
____
 
Haz. Substances ____
____
 
Well Water ____
____
 
Cesspool ____
____
 
Radon Gas ____
____
 
Lead Contamination ____
____
 
Flood Plain ____
____
 
Other.....  

NOTICE: to waive lead, cesspool, and/or well water inspections, Buyer must initial below.

________________       Buyer waives Buyer’s 10-day right to test/inspect for the presence of lead.

Initials of Buyer          

________________       Buyer waives Buyer’s 10-day right to test the water quality of a

Initials of Buyer           private well in accordance with RI Department of Health regulations.

________________       Buyer waives Buyer’s 10-day right to inspect a cesspool.

Initials of Buyer

Additional Provisions: ...................................................................................................................................………………………………………………………………………………………………………………………………………

If any inspection by a recognized and reputable inspector or inspection company, performed within the Inspection Period, discloses any existing, substantial/materially deficient condition* which has not been disclosed to Buyer prior to the execution of the Agreement, Buyer, upon providing the inspection report verifying said existing, substantial/materially deficient condition*(s) to Seller within seven (7) days after Buyer has obtained a copy of said report (Buyer's receipt of said report shall be governed by Section 17 of this Agreement), may:

(a) Allow the Seller the opportunity to cure such deficient condition*(s) by providing a written list of those items Buyer requests Seller to correct, whereupon Seller shall be given seven (7) days after receipt of the report and request to notify, per Section 17, Buyer in writing if Seller agrees, at Seller’s own expense, to correct the deficient condition*(s).

Buyer and Seller should mutually agree prior to any work being performed what each other's obligations will be subsequent to such performance.

(b) If Seller does not so agree or perform, and Buyer has not waived this contingency in writing, this Agreement shall be null and void and Buyer shall have the right to the Deposits in accordance with Section 5 or;

(c) Terminate this Agreement by notifying Seller in writing within seven (7) days of receipt of the inspection report, whereupon this Agreement shall be null and void and Buyer shall have the right to the Deposits in accordance with Section 5.

(d) Buyer and Seller may agree to prorate the cost of correcting said existing, substantial/materially deficient condition*(s). Said corrections are to be performed by a recognized and reputable contractor to accepted industry standards or as otherwise mutually agreed.

*“Deficient condition” is defined as a structural, mechanical or other condition that would have a significant adverse effect on the value of the Property; that would significantly impair the health or safety of future occupants of the Property, or that, if not repaired, removed or replaced would significantly shorten or have a significant adverse effect on the expected normal life of the Property. Deficient condition does not include structural, mechanical or other conditions the nature and extent of which Buyer had actual knowledge or written notice before signing this Agreement.

Lastly, if you are purchasing a Condominium, you may be released from the Purchase and Sale Agreement if you have

A. Acknowledged the receipt of the Condominium Documents, in writing.

B. Within 10 days of receipt, given written notice to the seller that you do not accept provided Condo Documents.

 

OR

C. Within 5 days of receipt, given written notice to the seller that you do not accept provided Condominium Resale Certificate.

 12. Condominium Documents: s Seller shall deliver the following documents to Buyer or Cooperating Licensee in accordance with Section 20:

(a) A copy of the Condominium Declaration, including all amendments.

(b) A copy of the Condominium Bylaws, including all amendments.

(c) A copy of the Rules and Regulations of the Condominium Association, including all amendments.

(d) An insurance certificate for the Condominium master insurance policy.

(e) Other ……………………………………………………………………………………………………......................

Buyer agrees to acknowledge receipt of the following documents in writing. Buyer shall have ten (10) days from the receipt of the documents to review these documents or refer them to an attorney for review. If within such ten (10) day period Buyer gives Seller written notice that Buyer does not accept the above documents, the agreement shall be null and void, and Buyer shall have the right to the Deposits in accordance with Section 5. If Seller does not receive written notice within such period, these documents shall be deemed accepted by Buyer and this contingency shall be deemed to be waived.

13. Condominium Resale Certificate: e Seller shall deliver the Resale Certificate pursuant to R.I.G.L. 34-36.1-4.09 to Buyer or Cooperating Licensee in accordance with Section 20. This Agreement is voidable by Buyer until the Resale Certificate has been provided and for five (5) days thereafter, or until closing, whichever occurs first. The law states that Buyer “is not liable for any unpaid assessment or fee greater than the amount set forth in the certificate prepared by the association.”

Buyer shall have five (5) days from the receipt of the documents to review these documents or refer them to an attorney for review. If within such five (5) day period Buyer gives Seller written notice that Buyer does not accept the above documents, the agreement shall be null and void, and Buyer shall have the right to the Deposits in accordance with Section 5. If Seller does not receive written notice within such period, these documents shall be deemed accepted by Buyer and this contingency shall be deemed to be waived.