May 8th, 2017 at 9:47 am
Answer: It depends on which disclosures have not been signed. The RPA does require the buyer to sign the TDS, NHD, lead-based paint, and certain other “Statutory Disclosures” (see paragraphs 10A(1) and 10A(5)). If the buyer fails to sign the Statutory Disclosures during the buyer’s inspection contingency period, the seller can serve a Notice to Buyer to Perform (NBP) (see paragraph 14D(2)). After that, if the buyer still refuses to sign the Statutory Disclosures within 2 days, the seller can cancel. Of course, if the seller doesn’t want to serve a NBP or cancel under these circumstances, that’s the seller’s prerogative. In that situation, you should create a paper trail informing the seller in writing as follows: (1) Provide details of the numerous attempts you made to obtain the buyer’s signatures to no avail; (2) Inform the seller that not getting the buyer’s signatures is against our advice; and (3) Recommend that the seller consults with his or her own attorney as the seller deems appropriate concerning any possible legal consequences of not obtaining signatures.
Many disclosures, however, are not “Statutory Disclosures,” such as the Seller Property Questionnaire, the Market Conditions Advisory, the Trust Advisory, and so on. For these non-statutory disclosures, you can still encourage the buyer’s side to sign them, by pointing out the requirement in paragraph 10A(5) of the RPA. However, the RPA does not specifically give the seller the right to serve a NBP because of the buyer’s failure to sign non-statutory disclosures (see paragraph 14D(2)). If the seller nevertheless intends to move forward with the transaction, again, create a paper trail as outlined in the above paragraph.
-Thank you to Rick Chimienti (Beverly Hills 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 May 8, 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.
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