Why Does Every Broker on Oahu Have Their Own Standard Addendum?

A Broker’s Standard Addendum is designed to reduce the liability for the Broker.

For example, paragraph one of the OahuRE.com Standard Addendum states that Brokers are released from any liability in areas in which professional services have been recommended and where we are not experts. The termite inspection is an example of this. We always recommend a termite inspection from a professional inspector, and we are not qualified to do one. The termite inspectors are really good and I can’t remember ever having a home with live termites where tenting was not recommended because the inspector did not notice the infestation, but if a mistake was made we are not liable as the buyer picked the inspector and the inspector would be liable for any mistakes made. Inspectors normally have a clause in their contract that states their liability is capped at the total amount spent on the inspection, and I have seen cases where the home inspector refunds the inspection fee.

Scope of Service from OahuRE.com Standard Addendum

The Standard Addendum also gives the buyer some more ways to cancel, which again reduces the liability for the Broker.

For example, if the termite inspection finds a live infestation or damage the buyer could cancel the contract. This right is the OahuRE.com Standard Addendum, but not in the standard Hawaii Purchase Contract. This right is important because buyers might be uncomfortable with the extent of the termite problem the inspector finds and should have the right at that point to cancel.

Termite Inspection cancellation right in OahuRE.com Standard Addendum

Another area we want to make sure the buyer has the right to cancel if they can’t get the loan. While the Hawaii Purchase Contract also gives them this right, it is a bit confusing as there are certain dates that must be met, and if one is missed the seller could claim they waived the financing contingency and try to keep the buyer’s deposits even when they can’t get the loan. On the OahuRE.com Standard Addendum, we give the buyer the right to cancel if the loan does not come through or the appraisal is low and we do not restrict the time period they can do so. This means the seller can’t claim the buyers lost their right to cancel because they missed a deadline in the Purchase Contract.

Finance Contingency in OahuRE.com Standard Addendum

In many cases the seller’s agent will counter the offer to replace our Standard Addendum with their own Standard Addendum which they are more comfortable with. We do not have an issue with this. It happens a lot, and the buyer still has all their rights to cancel built into the contract and I have not seen any Standard Addendum that removes the buyer’s right to cancel and get their deposits back as stated in the Hawaii Purchase Contract.