February 27th, 2023 at 2:27 pm
Multiple Choice Question: Has the buyer removed the Investigation of Property Contingency? Pick the best answer:
A. Yes.
B. No, the seller must serve a Notice to Buyer to Perform.
C. No, the buyer must sign a separate Contingency Removal form.
D. It depends on how the RR was completed.
Answer: Answer A is the best answer! Under paragraph 4A of the RR, the buyer’s Investigation of Property Contingency is removed when the seller agrees to all of the buyer’s requests. Perhaps paragraph 4A could have been drafted more clearly, e.g. by adding that the contingency shall conclusively be deemed removed without a separate Contingency Removal (CR) form. However, the wording in the RR, “Buyer removes the Investigation of Property Contingency,” is essentially the same as the wording in a CR form.
Answer B is wrong. The seller does not need to serve a Notice to Buyer to Perform, because the Investigation of Property contingency has been removed.
Answer C is also wrong. The buyer need not sign a separate CR form. However, if you were the listing agent, you would generally want to discuss with your seller the option of requiring the buyer to remove all contingencies using a separate CR form, rather than just the Investigation of Property contingency. After all, if the buyer still has, for example, a loan, appraisal, or documents contingency, the buyer may still try to renegotiate or cancel under those contingencies.
As for Answer D, it might not be wrong. But Answer A is the best answer to the question asked.
-Thank You to Eric Kaliski (La Jolla Office) for suggesting this week’s legal tip!
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