Multiple Choice Question: You are the listing agent, and you have just received a non-contingent offer written on a C.A.R. Residential Purchase Agreement (RPA), along with a signed Contingency Removal (CR) form removing all the buyer’s contingencies. If the seller accepts this offer, is the seller still required to allow the buyer to conduct inspections? Pick the best answer:

A. Yes, unless the seller counters that the buyer shall have zero days (instead of 17 days) to inspect under paragraph 14B(1) of the RPA.
B. Yes, unless the seller counters that the buyer shall have zero days (instead of 17 days) to access the property under paragraph 14B(5) of the RPA.
C. Yes, because the seller must “make the Property available for all Buyer Investigations” under paragraph 12B of the RPA.
D. No, because the buyer has removed the “physical inspection portion of Buyer’s Investigation” under paragraph I.2.A.3.a of the CR. 

Answer: Yikes! This might be a tough one! Answer A is wrong. Paragraph 14B(1) is the timeframe for the buyer’s inspection contingency. A buyer’s “right to inspect” is not the same thing as the buyer’s “inspection contingency.” A buyer’s “right to inspect” is the buyer’s ability to personally view the property, and order a home inspection, termite inspection, and other things (see paragraph 12A). A buyer’s “inspection contingency” under the RPA is the ability to cancel and get the deposit back if the buyer does not accept the condition of the property or any other matter affecting the property (see also paragraph 12A). The removal of the inspection contingency means that the buyer cannot cancel and get the deposit back based on the buyer’s inspections and investigations. Removing the inspection contingency does not necessarily mean that the buyer cannot conduct any inspections or investigations.

Answer B is the correct answer. Paragraph 14B(5) specifically provides the buyer with 17 days to access the property to conduct inspections, “whether or not any part of the Buyer’s Investigation Contingency has been waived or removed.” If, however, the seller counters the 17 days down to zero days, the buyer will have no access to the property. Of course, as the listing agent, be sure to advise your seller in writing that it’s against our advice to disallow access to the property, because, from a liability standpoint, we generally want buyers to have the opportunity to fully satisfy themselves with the condition of the property prior to close of escrow. Also, if we disallow access under paragraph 14B(5), the buyer will still be able to enter the premises during the final walk-through anyway under paragraph 15.

Answer C is wrong. It’s true that paragraph 12B requires the seller to “make the Property available for all Buyer Investigations.” However, “Buyer Investigations” is defined in paragraph 12A as the buyer’s right to conduct inspections and investigations within the contingency timeframe specified in paragraph 14B(1). Yet, as explained above, the buyer may have access under paragraph 14B(5), regardless of whether the buyer has the benefit of an inspection contingency.

Answer D is likely to be wrong, but the CR form could have been drafted more clearly. By removing all contingencies under paragraph I.2.C of the CR, a buyer is presumably removing all 3 different options for the “Investigation Contingency” in paragraph I.2.A.3 of the CR. The 3 options are as follows: (1) Only the physical inspection portion of Buyer’s Investigation; (2) All Buyer Investigations other than a physical inspection; or (3) Entire Buyer’s Investigation Contingency. For Option 1, it probably should say, “Only the physical inspection portion of Buyer’s Investigation Contingency,” rather than “Only the physical inspection portion of Buyer’s Investigation.” However, by looking at the document as a whole, it does appear that C.A.R. intended for Option 1 to pertain to the buyer’s investigation contingency only, and not the buyer’s right to investigate.

-Thank You to Carole Downing (Carlsbad Office) for suggesting this week’s legal tip!

Copyright© 2021 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 August 16, 2021. 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.