2019 OREF Form Changes

Many of the standard Oregon Real Estate Forms have been updated for 2019. Click here: for presentation slides on the 2019 changes. One significant change involves FIRPTA (Foreign Investment in Real Property Tax Act). From now on, sellers of residential property must prepare and submit a FIRPTA regardless of whether the Act applies. Thus, even if FIRPTA does not apply, the seller must prepare and submit a form indicating that the Act is not applicable.

OREF prepared the following practice tip:

“BEST PRACTICE - The Seller should fill out the form and send it directly to the escrow agent so that the social security number is not made available to the broker or staff. However, the Buyer’s agent, in particular, should confirm that the escrow agent has this form. The certification (or payment) is the only protection that the buyer has that they are exempt from or complied with the requirements of the Act. It appears that all escrow companies are willing to act as the Qualified Substitute in the event there is a foreign seller; however, some may limit the personnel who can act in this capacity so it will be necessary to check as to the company’s position. In this instance the Qualified Substitute (escrow agent) will collect and disburse the appropriate amount to the IRS. If you are the Seller’s broker and they are a foreign person, be sure that they have a Taxpayer Identification Number (“TIN”) as the Qualified Substitute (escrow agent) can not disburse funds within the 20 day time limit without this number. It can take weeks to secure this number from the IRS. It is recognized that the number of Foreign Sellers who will require withholding is a relatively small percentage in most areas; however, the liability of 10-15 % of the gross sales price is significant and should be eliminated. The option of deciding who might be a “foreign seller” is fraught with potential claims of discrimination or outright mistake; herefore, the only safe option is to require this certification from every seller.”