August 14th, 2017 at 11:18 am
Question: I know that, when entering into the newly-revised C.A.R. listing agreement, we should now ask sellers to also sign the separate, one-page Arbitration Agreement (C.A.R. Form ARB). However, the standard-form ARB only has signature lines for Seller, Buyer, and Broker. Who is supposed to sign as Broker?
Answer: You can. As a salesperson or broker-associate for the company, you can sign the listing agreement and the ARB on the broker’s behalf. After all, you used to initial the arbitration clause on the broker’s behalf when it was part of the listing agreement itself. If you want to clarify that you are the agent, not the broker, you can do so. You can, for example, insert the words “BHHSCP By” before your signature on the ARB. Alternatively, you can insert “(Agent)” after your signature.
(more…)
August 7th, 2017 at 11:12 am
In some sales transactions, problems may arise when the seller’s tenant remains in possession after close of escrow. One way to protect yourself as the agent is to use the new BHHS Tenant in Possession Advisory, currently available in our BHHSCP library in zipForm or through MyConnect. Give your clients the advisory and have them sign and return the acknowledgment of receipt.
The new Tenant in Possession Advisory lets your clients know that leasing is a serious matter. It encourages the buyer to investigate into all aspects of leasing to the seller’s tenants. Additionally, the advisory reminds clients that we will not act (more…)
July 30th, 2017 at 11:02 am
Question: If Owen Owner is the only person on title to the house at 123 Oak Street, can Sally Seller enter into a valid contract to sell that house to someone?
Answer: Yes. By entering into a purchase agreement, Sally does not promise that she is the current owner. Instead, she promises that the buyer shall receive a grant deed conveying title at close of escrow (see paragraph 13D of the RPA). If, however, Sally fails to convince Owen to sign the grant deed before close of escrow, Sally may be liable to the buyer for any monetary damages suffered (but not specific performance because Owen never agreed to sell).
(more…)
July 24th, 2017 at 10:59 am
Question: In last week’s legal tip, you made a distinction between the word “Days” with a capital D, and “days” not capitalized, as used in the C.A.R. Residential Purchase Agreement (RPA). Aside from the first word of a sentence, is there a meaning for all the other capitalized words in the RPA?
Answer: Yes. Words that are capitalized in the RPA are specifically defined. Capitalized words, such as “Days,” “Days After,” or “Deliver” are specifically defined in paragraph 30 of the RPA. Their contract definitions are more elaborate than their dictionary meanings. In addition to words defined in paragraph 30, other words in the RPA are capitalized and set out in quotation marks (e.g. a blank line followed by the word “Buyer”). Every subsequent use of that capitalized word in the RPA is a reference back to what was previously set out.
(more…)
July 17th, 2017 at 10:56 am
Multiple Choice Question: Escrow closes on Friday. The seller has an additional 2 “calendar days” to deliver possession to the buyer, according to paragraph 9B of the Residential Purchase Agreement (RPA). Monday and Tuesday of the following week are not legal holidays. What day is the seller supposed to be out? Pick the best answer:
A – Saturday, because you count Friday as Day 1.
B – Sunday, because that’s 2 calendar days after Friday.
C – Monday, because the last day cannot fall on a Sunday.
D – Tuesday, because you don’t count weekends.
Answer: The correct answer is B or Sunday, which is 2 calendar days after Friday. The special rule for excluding Saturdays, Sundays, and legal holidays does not apply in this situation because the word, “days,” is not capitalized in paragraph 9B of the RPA. Saturday is a wrong answer, because Friday is Day 0, not Day 1. Monday is wrong too. The word, “days,” must have a capital “D” before the special rule kicks in for excluding weekends and holidays under paragraph 30F of the RPA. Tuesday is wrong, because, even under the special rule (not applicable here), you still include Saturday, Sunday, and legal holidays when counting days, but if the last day to perform falls on a weekend or legal holiday, the buyer or seller has until the next business day to perform.
-Thank you to Aaron Gaston (Ventura Office) for suggesting this week’s legal tip.
Copyright© 2017 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 17, 2017. 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.
