Beginning in June we will be seeing a new contract for the purchase of homes in Hawaii. Our contract was called the DROA (Deposit, Receipt, Offer and Acceptance).
It has been called a DROA for as long as any of us have been around. When I first moved to Hawaii it was a single page that was two sided. The front was the contract and the back was all the fine type. Today the DROA is 12 pages long plus addendums.
What will be different about the new purchase contract? I can sum it up in two words: THE NAME.
It was felt by many that the name DROA was confusing to clients, and those from other states and countries. The traditionalist will have a hard time. Many will probably still want to refer to it as the DROA for awhile.
Along with the name change the new contract will incorporate a few house keeping changes.
C-20 & C-21 the sections on remedies will be replaced by:
- C-28 Termination Due to Default
- C-29 Termination Due to Contingencies
- C-30 Termination Due to other Circumstances
These new sections better identify the ways and reasons for cancelling the contract when the other side does not perform.
Another major change is that under C-7 a buyer's failure to meet financing obligations is no longer grounds for an automatic extension. Buyer can no longer rely on funding delays as a reason to extend.
There were several other housekeeping changes to update the language to conform to already accepted practices.
- For example adding in language to include electronic (digital or fax) not just fax for transmitting documents.
- Under condo docs, a check box was added for planned community.
- A new dual agency consent was added, which will be followed by a new standard dual agency form.
The good news is the Purchase Contract will remain at 12 pages long. It looks just like the old DROA and other than a few needed improvements will have a small learning curve for Realtors.
