August 28th, 2023 at 2:22 pm
Fact Pattern: A buyer and seller are in a pending sales transaction using the C.A.R. Residential Purchase Agreement (RPA). The buyer submits a Request for Repair asking the seller to do a list of repairs to the property. In response, the seller issues a Seller Response and Buyer Reply to Request for Repair (RRRR). In paragraph 1 of the RRRR, the seller agrees to credit the buyer $5,000 in lieu of any repairs. In paragraph 2 of the RRRR, the seller also requires the buyer to remove all contingencies as identified on the Contingency Removal (CR) form that the seller attaches to the RRRR. Right before the RRRR expires, the buyer counter-signs and returns the RRRR, but does not sign or return the CR form.
Multiple Choice Question: Is the seller required to credit $5,000 to the buyer, and has the buyer removed all contingencies? Pick the best answer:
A. Yes, the seller must credit the buyer, and yes, the buyer has substantially complied with the requirement to remove contingencies.
B. Yes, the seller must credit the buyer, but no, the buyer has not removed contingencies.
C. No, the seller is not required to credit the buyer, and no, the buyer has not removed contingencies.
D. The answer depends on whether the buyer’s failure to sign and return the CR was intentional or inadvertent. (more…)
August 21st, 2023 at 12:42 pm
Background: This is Week 4 and the final week of our series of Legal Tips involving the “5-Day Rule” in C.A.R.’s Residential Purchase Agreement (RPA). Please take a look at the Legal Tip discussions from 2 weeks ago for the 5-Day Rule for late reports (under paragraph 14B(3)), and last week for new discoveries (under paragraphs 11A(4) and 11G(1)). This week, we will drill down on the 5-Day Rule under the TDS law.
Multiple Choice Question: A buyer is in a pending sales transaction using the RPA. The seller, who must comply with the TDS requirements, provides the buyer with a TDS. The buyer then removes all contingencies. After that, an inaccuracy in the TDS that materially affects the property is discovered. Does the buyer have a right to cancel within 3-to-5 days and keep the deposit? Pick the best answer:
A. Yes.
B. Yes, if the seller provides the buyer with an amended TDS.
C. Yes, as long as the inaccuracy was not discovered by the buyer or disclosed in reports or documents provided to or ordered and paid for by the buyer.
D. No. (more…)
August 14th, 2023 at 2:35 pm
Background: This is Week 3 of our series of Legal Tips involving the “5-Day Rule” in C.A.R.’s Residential Purchase Agreement (RPA). This week, we will be taking a closer look at the 5-Day Rule for new discoveries as set forth in paragraphs 11A(4) and 11G(1) of the RPA.
Multiple Choice Question: A buyer is in a pending sales transaction using the RPA. The seller is exempt from the TDS requirement. After the buyer removes all contingencies, a new adverse condition materially affecting the property is discovered. Which of the following way(s) by which the adverse condition is discovered will the buyer have a right to cancel within 5 days and keep the deposit? Pick ALL of the correct answers below:
A. The seller makes the new discovery, and discloses it to the buyer in writing.
B. The seller makes the new discovery, and discloses it to the buyer verbally.
C. The buyer’s inspector makes the new discovery, and discloses it to the buyer in a report that the buyer ordered and paid for.
D. The buyer makes the new discovery, which the seller did not know about.
E. The buyer makes the new discovery, which the seller knew about but concealed.
F. None of the above. (more…)
August 7th, 2023 at 1:43 pm
Background: To follow-up on last week’s Legal Tip, agents who refer to a “5-Day Rule” concerning C.A.R.’s Residential Purchase Agreement (RPA) could mean a 5-day rule for late reports (paragraph 14B(3)), new discoveries (paragraph 11G(1)), and/or cancellation rights under the TDS law (paragraph 11E). This week, we will be taking a closer look at the first 5-day rule for late reports.
Fact Pattern: A buyer is in a pending sales transaction. The RPA requires the seller to deliver all seller documents to the buyer within 7 days after acceptance (or by Day 7). The RPA also gives the buyer a 17-day contingency to review such documents (or by Day 17). The seller delivers all documents on Day 15, as well as serves a Notice to Buyer to Perform (NBP) to remove the seller-documents contingency.
Multiple Choice Question: Is the NBP valid? Pick the best answer:
A. Yes.
B. No.
C. It depends on whether there are any new discoveries in the seller documents.
D. It depends on whether this transaction falls under the TDS law. (more…)
July 31st, 2023 at 1:33 pm
Multiple Choice Question: What do agents mean when they refer to the “5-Day Rule” as it relates to C.A.R.’s Residential Purchase Agreement (RPA)? Pick the best answer:
A. A buyer’s right to: (1) Review reports that the seller delivers late; and (2) Cancel based on something on those reports.
B. A buyer’s right to cancel when a new material fact affecting the property is discovered during escrow.
C. A buyer’s right to cancel under the TDS law.
D. Any of the above. (more…)
