In the real estate and title world, changes need to be made to contracts daily. Understanding that addendums and amendments can act as the same notification for these changes is important so you’re not wasting time deciding on what form to fill out. Even though some may consider them to have different uses, you can use either of these forms for any instance to modify or add anything to an executed contract. This is because it does not matter what document or paper you sign for these changes, what executes the changes or modifications are the signatures of both parties agreeing to said conditions.
The technical definitions for these documents are as follows: An addendum is used to add additional terms that need to be included in an already executed contract. When you think of an addendum, think of “adding” something to the contract or agreement. You can also use and addendum to clarify things mentioned in the contract that may be unclear.
An amendment can be used to modify current terms and conditions of contract. This can also be used to modify spellings of a name that was initially incorrect in the contract.
To have a fully executed addendum or amendment, all involved parties, being the sellers and the buyers need to sign it and then it becomes part of the contract.
Instances where an addendum can be used
In a contract it states “Buyer to keep contents in garage” but that doesn’t say much so we need to clarify what contents stay and which ones go. In this scenario an addendum would be used to clarify the contents included with the purchase.
- Mini Fridge Included
- Christmas Ornaments Excluded
- Mountain bike Included
- Deep Freezer Excluded
When you have a closing date already agreed on but need to change the date, you would use an amendment. In this case, we already knew the closing date, but we need to amend it due to the postponing of closing. An amendment needs to be executed the same as an addendum does. The seller and buyer need to sign the amendment.
Instances where an amendment can be used
From spelling errors to updating a closing date, these are just two examples of needing an amendment. Here are some more.
- New Sales Price
- Terms of contact
- New amount of escrow due
All in all, there are a couple different ways to notate new modifications and terms in a real estate transaction. Things happen, spell check doesn’t always catch mistakes and sometimes you just need to modify those errors. No matter what the change is, you can always use either one of the two to get the notations made. What really makes the changes valid, isn’t the header or the name of the paper you’re signing, it’s the signatures of both parties agreeing to the new terms.
In summary, any changes to the originally written agreement will need some form of addendum or amendment.
At Title Junction, we care about helping you stay informed throughout your real estate transaction. The experts at our title company have extensive knowledge about real estate not only in Cape Coral and Fort Myers, but all of Florida as well.
Have questions? Give us a call at 239.415.6574.
In case you missed it, check out our last Title Junction post: What Is A ‘Business Day’ For Real Estate Loan Disclosures?