On July 24, 2024, C.A.R. plans to roll out its July Standard Forms Release, including about 30 new and newly-revised forms that comply with the recent NAR Settlement Agreement. Here are some of the highlights of C.A.R.’s July 2024 Forms Release: 

1. Residential Purchase Agreement (RPA) and other purchase agreements: As C.A.R.’s leadership announced on July 9, 2024, they have decided to remove from the RPA and other C.A.R. forms any references to a listing broker’s offer of compensation to a buyer’s broker. Not only has C.A.R. deleted any references to coop compensation in its forms, but it is also removing from its Forms Library the Cooperating Broker Compensation Agreement (CBC), and the Anticipated Broker Compensation Disclosure (ABCD).

2. Residential Listing Agreement (RLA) and other listing agreements: The first page-and-a-half of the RLA has been reformatted into a “grid” for all the blank spaces for negotiable terms, that need to be filled out. Also, similar to the RPA and other forms, C.A.R. has removed from the RLA any offer of compensation to buyers’ brokers. The RLA will now be auto-bundled in zipForms with a new Broker Compensation Advisory (BCA). The BCA explains, among other things, that, although a buyer will generally be obligated to pay the buyer’s broker, the buyer may nevertheless negotiate for the seller to pay that compensation owed.

3. Multiple Listing Service Addendum (MLSA): The provisions in the RLA explaining the benefits of using the MLS have been moved to a new stand-alone MLSA form to be used as an addendum to the RLA. Additionally, paragraph 5 of the MLSA explains what “Seller Concessions” are, and paragraph 5B(2) has a checkbox to check for the seller to authorize the listing agent to advertise in the MLS that the seller is willing to consider offers asking for concessions (if permitted under local MLS rules).

4. Buyer Representation and Broker Compensation Agreement (BRBC): Like the RPA and RLA, the negotiable terms of the BRBC are now in a “grid” format on the first page of the form. Starting on or about August 17, 2024, it will become mandatory for a buyer’s agent who is working with a buyer to enter into a BRBC or other written agreement with that buyer before touring a property. This new requirement will be incorporated into your local MLS rules as part of the NAR Settlement Agreement.

5. Buyer Identification of Preferences and Priorities (BIPP) and Buyer Financial and Personal Information (BFPI): The BIPP is a new form for a buyer to identify the buyer’s homebuying preferences and priorities, such as price range, number of bedrooms/baths, square footage, school district, and so on. The BIPP can be incorporated into the BRBC by checking the box in paragraph 2C of the BRBC. The BFPI is another new form for a buyer to disclose the buyer’s financial position, such as the amount of money available for a down payment, broker compensation, and closing costs; amount of anticipated loan; and whether the buyer currently owns or rents. The BFPI can be incorporated into the BRBC by checking the box in paragraph 2G(1) of the BRBC.

6. Property Showing and Representation Agreement (PSRA): The PSRA is a simple, short-version representation agreement that a buyer’s agent can use as an alternative to the BRBC. The PSRA entitles a buyer’s broker to compensation as specified if the buyer buys any of up to 3 identified properties.

7. Disclosure and Modification to Listing Agreement and Buyer Representation Agreement (DM-LA and DM-BR): Agents with existing clients who have already signed an RLA or BRBC before July 24, 2024, can use the new DM-LA or DM-BR respectively to notify their clients about upcoming changes under NAR’s Settlement Agreement. The DM-LA and DM-BR inform clients that, on or about August 17, 2024, the agent will be notifying the client that the MLS no longer allows any offers of compensation to cooperating buyers’ brokers. Additionally, for the DM-LA, it states in paragraph 2 that, unless the box provided is checked, the total compensation set forth in the RLA shall be reduced by the amount that the seller had previously authorized as an MLS offer of compensation to cooperating brokers.

8. Tenant Representation and Broker Compensation Agreement (TRBC): C.A.R. has drafted a new TRBC form for an agent to enter into a for-compensation representation agreement to help a prospective tenant find a place to rent.

Source: More information about C.A.R.’s July 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 July 2024 forms, as well as draft copies of the new forms and redline versions of the newly-revised forms. C.A.R.’s website also provides more information about Broker Compensation Compliance in light of the NAR Settlement Agreement.

Copyright© 2024 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 July 22, 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.