Legal Live Webinar: December Forms Revisions Twice a year, with the approval of the C.A.R. Standard Forms Committee, C.A.R. releases new and revised forms. The first forms release occurred in April.  The second forms release is scheduled for December 14. All in all, the December release will have a total of more than 30 new or revised forms and four forms will be discontinued.

While many of the changes in the December forms release are relative minor, others have the potential to impact the way licensees conduct business going forward. Join C.A.R. Attorneys Neil Kalin and Howard Fallman on Tuesday, December 1, from 1:30 to 2:30 pm for a Legal Live Webinar discussing the new and revised forms and how they may affect your real estate practice.  The Webinar will discuss changes to the Residential Purchase Agreement, the Residential Listing Agreement, the Request for Repairs and the Seller Multiple Counter Offer and new forms such as the Delivery of Notices Addendum, two subdivision forms, and an Agricultural Addendum to name a few.

You can sign up for this webinar at Space is limited and may fill up fast. You may want to sign up as quickly as you can. As soon as you register you should immediately receive a confirmation email which you will need to attend the webinar.

Selected Forms Revisions: The RPA and the RLA Among the forms changes that you will most likely want to know about are changes to two of the most used C.A.R. forms: the California Residential Purchase Agreement and Joint Escrow Instructions (RPA) and the Residential Listing Agreement (RLA).

The RPA is being revised to provide the ability to write an offer with some or all of the buyer’s contingencies removed or waived.  The Standard Forms Advisory Committee heard comments from many REALTORS® around the state that buyers were wanting to write non-contingent offers and that this was very difficult to do with the current RPA format.  Notwithstanding that buyers are acting against their broker’s advice in doing so, buyers were asking for the ability to do this and often simply putting a zero in the contingency period in the offer. Because the RPA was not designed to accommodate a zero in the contingency period, this has created an unclear legal result.  Are there no contingencies or just no contingency period? Does this mean that the seller will still have to provide the buyer with a Notice to Perform, thus in reality creating at least a two day contingency period? The December release, after providing a warning to buyers to not write a non-contingent offer without having first conducted appropriate investigations of the property, will allow the buyer to write an offer removing the contingencies on the ATTACHED AND SIGNED BY BUYER Contingency Removal Form (CR).  It will also provide that the buyer who has removed their physical investigation contingency will still have the right to access the property to conduct non-contingent investigations for a set amount of time.

The Residential Listing Agreement (RLA) will also have two significant changes. First, the RLA will now be able to be used with a probate, trust or manufactured home listing, as well as with a traditional sale.  By checking the appropriate box in the RLA, either the Manufactured Home Listing Addendum (MHLA) or the Probate Listing Addendum (PLA) will be automatically attached to the RLA.  This was done because the Manufactured Home Listing Agreement and the Probate Listing Agreement, as well as the Trust Listing, were essentially the same agreement as the RLA. To facilitate the signing of a listing by the representative of a probate estate, conservatorship or trust, or by a power of attorney or the representative of another legal entity, the Representative Capacity Signature Disclosure (For Seller Representatives) (RCSD-S) will be referenced near the seller’s signature and automatically attached if the box is checked.

A second significant change will be found in the “safety clause” or “protection period” provisions. In the current RLA, the listing agent has three days after the expiration or cancellation of the listing to provide the seller with a list of “protected buyers” who have either entered the property or written an offer on the property.  If one of these buyers should buy the property within the protection period, the original listing agent would be entitled to a commission.

In practice this currently means that if the seller enters into a listing with a new broker immediately after the first listing expires, that new listing broker may not know for three days if there are any protected buyers and how many there may be. When the revised RLA is released in December, the listing agent who wants to preserve his or her rights to “protected buyers” will have to provide the seller with their names NO LATER than the end of the listing period or any extension or cancellation. The Notice of Protected Buyers (NPB) is intended for this purpose.  Instead of waiting until the listing has expired to collect the names of protected buyers, listing agents will want to keep a rolling list of buyers who have entered the property or written an offer.

PACE Programs PACE (Property Assessed Clean Energy) financing programs, which include the HERO program, California First and Ygrene are being utilized by homeowners to finance energy and water conservation and renewable energy improvements to their homes. The programs create problems for sellers when they sell their homes due to the super priority status of the lien put on the property for the financing.  While programs tout the ability of the seller to transfer the lien to the buyer, most buyers with conventional financing will not be able to purchase the home unless the lien is paid off by the seller prior to close. REALTORS® and other groups are concerned about a lack of adequate disclosures of the financing terms, including prepayment penalties and high interest rates along with some of the representations and advertising that may overpromise potential “savings.” Detailed information on PACE programs and the issues surrounding them is available in the Q&A PACE Liens and Solar Leases.

There are also concerns about unscrupulous contractors convincing homeowners to hire them to make overpriced and underperforming (as far as energy savings) improvements to their homes and finance those improvements through a PACE program. Homeowners who believe they have been taken advantage of or even approached by such unscrupulous contractors should inform the PACE program in their area and also contact the Contractors State License Board to file a complaint or in egregious cases even contact local law enforcement or their county district attorney’s office.

PACE programs know that unscrupulous contractors hurt their programs’ reputations and usually have systems in place to try to make sure that contractors approved by their programs meet certain standards.  However, even with such standards, unscrupulous contractors may end up getting approved.  In order to help rid their programs of such contractors and to address any problems created by them, programs may assist homeowners to resolve any problems they have with contractors who approach them or who do work for them.  The HERO Program, for example, offers  HERO Protect ™ , a service which assists consumers who are having an issue with a contractor, whether or not the problem is related to a HERO related job.