On December 17, 2024, C.A.R. plans to roll out its December 2024 Forms Release. The roll-out includes roughly 64 new and newly revised forms, although many of the changes are minor revisions. Here are some of the highlights of C.A.R.’s December 2024 Forms Release: 

1. Residential Purchase Agreement (RPA) and other purchase agreements: The section in paragraph 3G of the grid for “Seller Payment to Cover Buyer Expenses” has been streamlined to avoid confusion. Paragraph 3G(1), as revised, will be used for any seller credit for closing costs only. Paragraph 3G(2) will be for any additional seller concessions (other than coop comp). As for paragraph 3G(3), the language in the separate C.A.R. Seller Payment to Buyer’s Broker form (SPBB) has been incorporated into the RPA itself. You do not need to attach a separate SPBB form anymore.

Paragraph 3G(3) also has a new “Buyer Compensation Affirmation” requiring the buyer to affirmatively vouch for the fact that the buyer has a valid buyer-broker agreement that includes the subject property and provides for compensation for no less than the amount that the buyer is asking the seller to pay. Additionally, under paragraph 18 of the RPA, if that Buyer Affirmation is untrue, the seller has no obligation to pay the buyer’s broker.

2. Counter Offer Forms (SCO, SMCO, and BCO): The counter offer forms have been revised to allow parties to move forward even when something has already expired. There are 2 expiration scenarios. In Scenario #1, a party can use a counter offer form, even if the prior offer has already expired. As an example, if a buyer’s offer has already expired, the seller can nevertheless use an SCO to counter that offer. Paragraph 4 of the SCO now says that “This counter offer is valid regardless of whether any previous offer or counter offer expired by its terms.” To create a valid contract, the buyer would have to countersign in paragraph 5 of the SCO in a timely manner, and return it to the seller’s side. Scenario #2 allows an offeree to move forward, even if the offeror’s counter offer has already expired. To illustrate, let’s say that the buyer in Scenario #1 did not respond to the SCO in a timely manner. The buyer can nevertheless sign in paragraph 5 anyway. To create a valid contract, the seller must sign again in paragraph 6 to ratify the buyer’s “Late Acceptance.”

3. Residential Listing Agreement (RLA): The RLA has been revised to authorize the listing agent to advertise that the seller is willing to consider offers asking for concessions (see paragraph 3E(2)). The authorization can be for ads in the MLS and/or other marketing materials. This language was moved over from paragraph 5B(2) of the Multiple Listing Service Addendum (MLSA). Additionally, the RLA now defines “Seller Concessions” as monetary payments from a seller to contribute towards a buyer’s expenses (see paragraph 10). This language was also moved over from paragraph 5A of the MLSA form.

4. Buyer Representation and Broker Compensation Agreement (BRBC): C.A.R. has made some minor changes to the BRBC. First, although the BRBC defaults to single-family homes, there’s a new checkbox in case the parties want to exclude single-family homes. Second, whereas the BRBC used to only allow a 30-day cancellation notice for exclusive representations, there is a new checkbox for inserting a shorter notice. Third, paragraph 3G(2) now clarifies situations involving buyers who do not have sufficient funds to pay the buyer’s broker. If that box is checked, and as it turns out, the seller for a specific property refuses to pay the coop comp, the broker can cancel the buyer-broker representation agreement with respect to that property. To cancel in that situation, use the following 2 forms: (1) Cancellation of Buyer Representation (COBR) that has been newly revised to allow cancellation with respect to only one property if desired (see paragraph 2C(2)); and (2) Cancellation of Agency Confirmation (CAC) which is a new form and further discussed below.

5. Cancellation of Agency Confirmation (CAC): The CAC is a new form for changing any pre-existing Confirmation of Agency in paragraph 2B of the RPA. The CAC has 2 sections. Section 1 of the CAC can be used when cancelling a buyer’s agency relationship. As the buyer’s agent, you would use a COBR (see above) to cancel your agency relationship with your buyer. However, if you are the buyer’s agent in paragraph 2B of an RPA, you may also want to use Section 1 of the CAC to notify the seller and listing agent of your cancellation. As for Section 2 of the CAC, it can be used if a replacement broker will be taking over. Section 2 can be used in connection with Section 1 or by itself. Section 2 can also be used to replace either a buyer’s broker or seller’s broker.

6. Summary of Multiple Offers (SUM-MO): The SUM-MO has been updated to include a comparison of what the different buyers are asking the seller to pay, including buyers’ closing costs and their buyer’s broker fee. The SUM-MO also has new fields for the buyer’s insurance contingency, which was separated out from the buyer’s investigation contingency back in June 2024.

7. Estimated Compensation Costs for Buyer or Seller (ECC-B and ECC-S): These 2 new forms are very basic, but can be used as marketing tools to show clients how much money the buyer’s broker fee may cost. The ECC-B shows a buyer how much money the buyer will have to pay if the seller pays for all, some, or none of the coop comp. The ECC-B can be used for 2 different purchase prices. The ECC-S illustrates to a seller how much money the seller will net if the seller pays all, some, or none of the coop comp for 2 purchase prices.

8. Residential Lease or Month-To-Month Rental Agreement (RLMM): The RLMM has been updated to include “Broker Compensation” in paragraph 42. There are new checkboxes if the owner agrees to pay the tenant’s broker (paragraph 42B), and if the owner authorizes any portion of the tenant’s move-in funds to be made payable to the landlord’s broker and tenant’s broker (paragraph 42C).

9. Offer of Tenant Positive Rental Payment Reporting (TRPR): The new TRPR will now be auto-bundled in zipForms with the Residential Lease Agreement (RLMM). The TRPR addresses a new law that will come into effect on April 1, 2025. Under the new law, a residential landlord must generally offer the tenant the reporting of positive rental payment information to at least one nationwide consumer reporting agency, such as Experian, Equifax, or TransUnion. The TRPR explains the logistics for tenants to opt in or opt out of having their positive rental information reported, including the landlord’s right to collect a service fee of the actual cost, not to exceed $10 per month. Certain landlords may be exempt from the new requirement if they meet all of the following 3 requirements: (1) Property is no more than 15 units; (2) Landlord owns no more than one residential rental building; and (3) Landlord is not a corporation, an LLC with a corporation as an LLC member, or an REIT. A landlord who is exempt should check the exemption box in paragraph 1B of the TRPR.

10. Application For Rent (LRA): The Application for Rent has been updated to address a new law concerning tenant screening fees that comes into effect on January 1, 2025. The new law does not pertain to landlords who do not charge a screening fee to their tenant applicants. Otherwise, under the new law, a landlord must generally return all screening fees to applicants who were not selected, with certain exceptions, as more fully set forth in Section II.2.C. on page 3 of the revised LRA.

Source: More information about C.A.R.’s December 2024 Standard Forms Release is available on C.A.R.’s Standard Forms webpage (password-protected for C.A.R. members only). The webpage includes a Quick Summary Guide of the December 2024 forms, as well as draft copies of the new forms and redline versions of the newly-revised forms.

Copyright© 2024 Shared Success Center, LLC (serving HomeServices of America companies). All rights reserved. Any unauthorized reproduction or use of this material is strictly prohibited. This information is believed to be accurate as of December 16, 2024. 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.