February 22nd, 2016 at 6:25 pm
Question: I submitted a very clean all-cash, full-price offer on behalf of my buyer for a property listed in the MLS. The listing agent is with another brokerage. Even though the sellers have no other offers, they rejected our offer. Doesn’t my buyer have the legal right to purchase the property?
Answer: No (except see fair housing issue below). Placing a property in the MLS is not an offer from the seller to sell the property. Instead, it is an offer from the listing broker to pay compensation to a cooperating broker for procuring a buyer who enters into a purchase contract in accordance with the MLS rules. One possible but oftentimes hard-to-prove exception is if the sellers rejected your buyer based on race, color, creed, sex, or other discriminatory reason in violation of the fair housing laws.
Follow-Up Question: So the listing agent can just get away with spinning our wheels in this manner?
Answer: No, not necessarily! You are now one of the very few agents who know that, for an MLS listing, the listing agent must immediately inform the MLS and all cooperating brokers when the seller has refused an offer satisfying the terms and conditions stated in the listing (see Rule 10.5 of the C.A.R. Model MLS Rules). So one possible strategy is for you to look up the equivalent of C.A.R.’s Model Rule 10.5 in your own local MLS rules, and show it to the listing agent. Also encourage the listing agent to have the sellers reconsider your buyer’s offer, otherwise you will expect the listing agent to immediately inform all cooperating brokers that the sellers rejected your buyer’s offer. If the listing agent refuses or otherwise fails to comply with your request, you may be able to file a complaint at your? local MLS for the listing agent’s MLS violation.
February 16th, 2016 at 11:38 pm
Question: I’m taking a listing for a trust. Title to the property is held in the name of “John Doer as trustee of the John Doer Family Trust dated June 2, 2003.” I noticed that C.A.R. doesn’t have a standard-form Trust Listing Agreement anymore. Do I just use the regular listing agreement and put the trust as the seller?
Answer: As to the first part of your question, the answer is “yes.” For a trust listing, use the regular C.A.R. Residential Listing Agreement (Form RLA), and check the box in paragraph 16 to attach the Trust Advisory (Form TAL). As to the second part of your question, the answer is yes, you can put the trust as the seller, but that’s probably not the best way. A better way may be to insert either “John Doer, trustee” or “John Doer” as the seller, and above his signature line, check the “Representative Capacity” box to attach the Representative Capacity Signature Disclosure (Form RCSD). Write the name of the trust on the RCSD, not the RLA. Checking the Representative Capacity box in the RLA means that all Mr. Doer’s signatures and initials on the listing agreement and related documents are to be deemed in his representative capacity as trustee of the trust. Another advantage for checking the box is it requires Mr. Doer to provide a trust certification or other evidence of his authority to act in his representative capacity within 3 days after entering into the listing agreement. We want to review this paperwork as soon as possible to make sure we don’t run into any issues involving the transfer of title.
February 1st, 2016 at 7:26 pm
Multiple Choice Question: Mr. Seller is in a pending sales transaction. The recent rainstorm has damaged his property. What is Mr. Seller’s obligation under the C.A.R. Residential Purchase Agreement (RPA)?
A.? To disclose.
B.? To repair.
C.? Both A and B.
D.? Neither A nor B.
Answer: Mr. Seller should both disclose and repair any damage to the property caused by the rainstorm. The correct answer is C. First, the disclosure requirement for new material facts that a seller becomes aware of during escrow is set forth in paragraph 10A(6) of the RPA. Second, a seller must also make repairs because, under paragraph 11, the property must be maintained in substantially the same condition as on the day of contract acceptance. In rare instances, a seller may argue that his or her performance is excused by an act of God, but California law defines that as an “irresistible superhuman cause,” so an ordinary rainstorm is unlikely to be enough, depending on the circumstances. For more information, see C.A.R.’s new rainwater legal article available at http://www.car.org/legal/real-property-title/rainwater/? (password-protected for C.A.R. members only).
January 25th, 2016 at 11:30 pm
Question: I am the listing agent for a single family home. I gave the disclosures to the sellers to complete. I just got the Transfer Disclosure Statement (TDS) form back with nothing completed other than the words “Not Applicable” written across the form. The sellers said they are exempt from completing the TDS because they have never lived in the house. Is that right?
Answer: No. You can advise the sellers in writing that non-owner occupied sellers of a residential property up to 4 units are not exempt from the TDS, NHD, and other disclosure requirements. You can attach? for their review the TDS exemptions set forth in section 1102.2 of the California Civil Code and/or C.A.R.’s legal article on TDS exemptions, available at http://www.car.org/legal/disclosure-folder/tds-exemptions/ (password protected for C.A.R. members only). You can also point out that, even if they don’t know certain things about the property because they haven’t lived there, writing “Not Applicable” across the form is unlikely to satisfy the TDS law’s specific requirement to act in good faith in completing the form (Civil Code section 1102.7). The sellers should simply complete the TDS based on their actual knowledge. Under the comment section at the bottom of page 2 of the TDS, they can explain that they have never lived in the house to alert the buyers of that fact.
January 18th, 2016 at 11:00 pm
Question: I am the buyer’s agent. We submitted an offer and, in response, we received a Seller Multiple Counter Offer (SMCO). We then submitted a Buyer Counter Offer (BCO) #1, which the seller accepted. However, the seller never signed in the box at the bottom of the SMCO (paragraph 8) to indicate acceptance of our buyer in the multiple offer situation. Should we ask the seller to sign the bottom of the SMCO?
Answer: Yes, that’s a good idea. Your buyer arguably has a valid contract without the missing signature. However, as a matter of prudence, getting the missing signature now prevents the seller from trying to use the lack of signature against the buyer at a later time. After all, the SMCO as revised in December 2015 specifically states in paragraph 2 that the “Seller shall have no duties or obligations” to sell unless, among other things, “Seller signs in paragraph 8.” Next time you counter an SMCO, you can just insert the following language in your BCO to avoid having to go back to get the seller’s missing signature:? “Seller agrees that, by signing in paragraph 4 below, Seller is entering into a binding Agreement with Buyer, regardless of whether Seller signs in paragraph 8 of the SMCO #1.”
