Successfully negotiating the Request for Repair is one of the final hurdles before reaching the “close of escrow” finish line. Unfortunately, however, it can be challenging sometimes navigating your way when using the C.A.R. repair forms (RR and RRRR). Here are 7 quick tips for you to help your clients conduct their Request for Repair negotiations, including some common pitfalls to avoid: 

1. Use the RR for Non-Repair Requests.
Buyers can use the C.A.R. Request for Repair (RR) to ask the seller to conduct repairs, or to take “other specified action” (see paragraph 1A on page 1). As the buyer’s agent, consider whether we can help our buyer tie up any remaining loose ends during the RR process. Examples abound, but they include requesting an extension, requesting an assignment, or asking the seller to obtain a letter from the HOA to clarify an issue that the buyer may have.

2. A Credit May Be Better Than Repairs.
Whenever a seller agrees to do a repair, the parties may end up disagreeing as to whether the repair was done timely and correctly. You can avoid those disagreements by doing a credit instead of repairs. However, keep in mind that any credit must be approved by the buyer’s lender if any (see paragraph 5E of the RPA).

3. Repairs Must Comply With the RPA Requirements.
As the seller’s agent, be sure that your seller understands the contractual requirements for any seller repairs before agreeing to do them. Seller repairs must be performed in a good, skillful manner with materials comparable to existing materials. The repairs must also comply with any applicable laws, and they must be completed at least 5 days before close of escrow. See paragraph 15 of the RPA for a list of all requirements.

4. Contingency Removal With an RR is Tricky.
A buyer’s contingencies are removed under paragraph 4 of the RR in either of 2 situations: (1) the seller agrees to all of the buyer’s requests; OR (2) the seller agrees to some of the buyer’s requests, AND the buyer accepts the seller’s partial agreement. Option 2 can get complicated. As the seller’s agent, make sure that you use paragraph 1B on page 2 of the RR for any “Partial Agreement,” and get the buyer’s acceptance in writing.

5. Properly Cross-Reference a CR.
For buyers’ agents: If you check the box in paragraph 4A(2) of the RR to attach a Contingency Removal (CR) form, make sure that you properly cross-reference the CR. On line 1 of the attached CR, it should say that the CR is in “accordance with the terms and conditions of” the RR, and not the RPA. Filling out the form in that manner clarifies that the buyer is only removing the contingencies on the CR if the seller agrees to the RR. If, however, line 1 of the CR were to say that the CR is in “accordance with the terms and conditions of” the RPA, rather than RR, it will appear as if the buyer is removing contingencies, regardless of what happens with the RR.

6. Buyer’s Release is for Disclosed Condition.
If a seller agrees with a buyer’s RR, the buyer will release the seller from any claims concerning the “disclosed” condition of the property (see paragraph 4B of the RR). Hence, as the seller’s agent, make sure that all issues concerning the property raised by the buyer have been “disclosed” in writing. Such issues should be set forth in paragraph 1A of the RR, and all inspection reports should be itemized in paragraph 2 of the RR. You can even have the buyer sign a C.A.R. Receipt for Reports (RFR) as needed, but get that signed before the seller agrees to any RR.

7. Clarify Whether a New Request is “In Addition To” or “Instead Of” a Prior Request.
What’s been negotiated can get confusing when various RRs and RRRRs go back and forth between the parties. You can help clarify your client’s position by adding explanatory phrases, such as, “Buyer’s prior RR#1 is deleted in its entirety.”

More Information: Our company’s Go LIVE meeting on April 25, 2023 included a segment on the Request for Repair presented by Stella Ling. The recorded version is available in Percipio.

Copyright© 2023 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 May 1, 2023. 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. Written by Stella Ling, Esq.