June 15th, 2020 at 1:12 pm

Fact Pattern: You are the listing agent. You receive an offer from a buyer who is working with a buyer’s agent from another brokerage. The buyer’s offer includes the C.A.R. Coronavirus Addendum or Amendment (CVA) (revised 4/30/20), but none of the boxes on the CVA form have been checked.

Multiple Choice Question: What should you do in this situation? Pick the best answer:

A. Ask the buyer’s agent to resubmit the offer with the appropriate boxes checked.
B. Advise the seller to reject the buyer’s offer.
C. Advise the seller to counter the CVA out.
D. Advise the seller to leave the CVA as part of the final agreement, given that paragraph 1 of the CVA, which has no checkboxes, does provide helpful information about the coronavirus pandemic anyway. 

Answer: Answer A is not a good answer. A listing agent should not tell a buyer’s agent to resubmit an offer without first presenting the offer to the seller, and getting the seller’s prior consent to ask the buyer’s agent to resubmit. Perhaps the price and terms of the buyer’s offer are so good that the seller just wants to accept it, regardless of the CVA. Or perhaps the price and terms are so bad that the seller just wants to reject the offer outright. The decision to request that a buyer resubmits an offer should be made by our seller, not by us as the listing agent.

Answer B is also not a good answer because, as mentioned above, a seller may not want to reject the buyer’s offer if the price and terms are good or at least close to what the seller wants.

As for Answer D or just leaving the CVA alone, it’s true that paragraph 1, which has no checkbox, merely states that the coronavirus pandemic has had unprecedented impacts on real estate transactions. It’s also true that paragraphs 3B, 4, and 5, appear to be inapplicable if the buyer did not check the boxes for those paragraphs.

However, Answer C or countering out the CVA, is the best answer in most situations. After all, paragraph 2 of the CVA, which also has no checkbox, states that, “This form is intended to contractually address an Unforeseen Coronavirus Circumstance.” Moreover, paragraph 3A with no checkbox states that a party affected by an Unforeseen Coronavirus Circumstance “shall Deliver to the other a Notice of Unforeseen Coronavirus Circumstance.” Standing along, those provisions are ambiguous at best. However, a buyer may nevertheless try to later argue that the seller had somehow agreed to a coronavirus-related delay or cancellation, or that the seller should not be allowed to take advantage of an inadvertent oversight by the buyer to check a box. To eliminate those possibilities, a seller may prefer to just counter the CVA out altogether.

-Thank you to Molly Haines McKay (Coronado Office) for suggesting this week’s legal tip.

Copyright© 2020 Berkshire Hathaway HomeServices California Properties (BHHSCP). All rights reserved. Any unauthorized reproduction or use of this material is strictly prohibited. This information is believed to be accurate as of June 15, 2020. It is not intended as a substitute for legal advice in individual situations, and is not intended to nor does it create a standard of care for real estate professionals.

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