July 10th, 2023 at 2:16 pm
As fair warning to everyone, today’s Legal Tip addresses an issue that you will want to know about before, not after, something goes wrong in one of your transactions!
Background: Last month, C.A.R. rolled out its June 2023 Forms Release, which included some new “clarification language” in C.A.R.’s Notice to Buyer to Perform (NBP). Unfortunately, the “clarification language” may actually cause confusion, as discussed below. But as a listing agent, you can easily sidestep this issue entirely by remembering that, under the Residential Purchase Agreement (RPA), a seller cannot serve an NBP for the removal of a buyer’s contingency until 2 days before the expiration of that contingency period (see paragraph 14E of the RPA).
Multiple Choice Question: Let’s say that a buyer with a signed purchase agreement has a 17-day inspection contingency, and a 25-day loan contingency. On Day 17 of the agreement, the seller serves the buyer with an NBP to remove all contingencies. Is the NBP valid? Pick the best answer:
A. Yes.
B. Yes for the removal of the inspection contingency, but not for the removal of the loan contingency.
C. Yes for the removal of the loan contingency, but not for the removal of the inspection contingency.
D. No. (more…)
June 26th, 2023 at 1:51 pm
On June 27, 2023, C.A.R. plans to roll out its June 2023 Standard Forms Release with changes to over 100 of its forms. Many of the changes are minor, including the changing of the word “Landlord” to “Housing Provider” for about 20 leasing forms, and an updated revision date for about 30 other forms. Here are some notable highlights of C.A.R.’s Forms Release: (more…)
June 12th, 2023 at 4:10 pm
Fact Pattern: A seller and buyer enter into a purchase agreement on Day 0. The C.A.R. Residential Purchase Agreement (RPA) calls for the seller to deliver all seller documents to the buyer within 7 days after acceptance, or by Day 7 (under paragraph 3N(1)). The RPA also gives the buyer a contingency for 10 days after acceptance to review the seller documents (under paragraph 3L(4)). The seller in this situation does deliver all seller documents to the buyer on Day 7.
Multiple Choice Question: When does the timeframe expire for the buyer’s contingency to review seller documents? Pick the best answer:
A. Day 10.
B. Day 12.
C. It depends on whether Day 10 or Day 12 is a Saturday, Sunday, or legal holiday.
D. Two days after the seller serves a Notice to Buyer to Perform (NBP). (more…)
June 5th, 2023 at 2:32 pm
Fact Pattern: A seller and buyer enter into a C.A.R. Residential Purchase Agreement (RPA). The buyer’s agent does not provide any Designated Electronic Delivery Address (DEDA). The seller has 7 days after acceptance to provide the seller disclosures to the buyer (under paragraph 3N(1) of the RPA). On Day 7, the listing agent emails the seller disclosures to the buyer’s agent. The buyer’s agent, however, does not check her emails until 2 days later (or Day 9).
Multiple Choice Question: When does the “Delivery” of the seller disclosures occur, as according to the RPA? Pick the best answer:
A. Day 7.
B. Day 9.
C. It depends on whether Day 7 is a Saturday, Sunday, or legal holiday.
D. It depends on whether Day 9 is a Saturday, Sunday, or legal holiday. (more…)
May 22nd, 2023 at 3:55 pm
Fact Pattern: You are the listing agent for a pending sales transaction. Many weeks into escrow, you discover for the first time that the buyer is the cousin of the buyer’s agent.
Multiple Choice Question: Has the buyer’s agent violated his or her duty to disclose that familial relationship when submitting the buyer’s offer? Pick the best answer:
A. Yes, as a matter of both law and ethics.
B. Yes, as a matter of law only.
C. Yes, as a matter of ethics only.
D. No. (more…)
