APRIL 2012 C.A.R. FORMS RELEASE – WHAT TO EXPECT FROM C.A.R. IN THE APRIL AND MAY RELEASES

Published: April 25, 2012

Full newsletter available here.
BY: JOHN V. GIARDINELLI, ATTORNEY,
CASEY MCINTOSH, PARALEGAL, researched and contributed to these articles.

The California Association of REALTORS® has finalized the forms currently set for release on April 30, 2012, as well as those that will be released in late May.

April Releases
Carbon Monoxide Detector Notice (New)

The Carbon Monoxide Detector Notice is a new disclosure form reflecting California Law that requires that all existing single-family homes have carbon monoxide detectors installed by July 1, 2011. All other dwellings intended for occupancy are to have carbon monoxide detectors installed by January 1, 2013. The latter deadline is intended for duplexes, lodging homes, dormitories, hotels, condos, time-shares, and apartments, among others. The purpose of the new form is to provide the buyer and seller with notice of the new requirements, exceptions to the requirements, and the penalties of non-compliance. It does not disclose if the requirements have been met by the sellers. The form states that sellers of residential 1-4 properties who are required to complete a Transfer Disclosure Statement (TDS), or a Manufactured Home and Mobile home TDS must use section II A of the forms to disclose whether the dwelling has a carbon monoxide detector. Failure to disclose or comply can result in a fine of up to $200. The form should be used as a rick management protection, although it is not mandatory.

Short Sale Addendum (Revised)
The Short Sale Addendum form has been revised to include language regarding cancellation of the California Residential Purchase Agreement, Counter Offer, or other agreement to sell a property via short sale. Pursuant to the existing form, the Short Sale Addendum is contingent upon the Seller’s receipt of and delivery to the Buyer of a Short Sale Lenders’ Consent no later than a the “Short Sale Contingency Date.” The revisions to this section of the form (1A) state that any cancellation of the Agreement prior to the Short Sale Contingency Date “must be pursuant to a right to cancel by the party in the Agreement notwithstanding that time periods in the Agreement have not commenced.” The rest of the form remains the same.

Homeowner Association Information Request:
The Homeowner Association Information Request has been revised from the November 2011 form to now include additional lines for the delivery of CC&Rs and notices of owner violations. The purpose of the Homeowner Association Information Request is to allow the parties to obtain documents from the HOA, (if available), pursuant to California Civil Code Section 1368. After the request is submitted, the HOA, usually through escrow, must provide an estimate of the fees that will be assessed for providing the documents and, within 10 calendar days, provide the requesting party with the items or information requested. The revision to the form now allows the parties to obtain information of CC&Rs and notices of owner violations, in addition to information regarding rentals, insurance, and defects, to name a few. Some of the information is mandated by statute. The form is an excellent and useful worksheet for the members working with properties in HOAs and Planned Unit Developments.

Commercial, Residential Income and Vacant Land Listing Agreement (Revised)
A new Section 6 has been added to the Commercial, Residential Income and Vacant Land Listing Agreement. This section applies specifically to properties listed in the Multiple Listing Service and states that all terms of the transaction will be provided to the MLS for “publication, dissemination and use by persons and entities on terms approved by the MLS.” However, there are also subsections that allow the seller to opt out of internet display of the property or the property address. Should the seller want to display the property on the internet, he or she also has the option to opt out of linking with other MLS Participant and Subscriber websites. What this means is that while the property will show up with on those sites, people searching the internet will not be able to link back to where the property is originally listed and will not be able to see comments or reviews. It is important to note, however, that the seller must opt out using a separate form (C.A.R. form Seller Instruction to Exclude Listing from the Multiple Listing Service or Internet).

Seller Instruction to Exclude Listing from the Multiple Listing Service or Internet (Revised)
The Seller Instruction to Exclude Listing from the Multiple Listing Service or Internet has also been modified. The amount of time to submit an exclusive right to sell and exclusive agency listing for real property or a vacant lot is not longer listed in hours, but has been changed to two (2) days. For those members who are in CRMLS, these are two (2) business days. Under most rule sets weekends and holidays are generally excluded. While the section dealing with the exclusion of a property from the MLS not been changed, it is important to take note that this form has a secondary purpose and can be used by sellers to make sure their property either does not appear on the internet or is not hyperlinked to reviews and comments.

Seller’s Affidavit of Nonforeign Status and/or California Withholding Exemption (Revised)
The November 2006 revision of the Seller’s Affidavit of Nonforeign Status and/or California Withholding Exemption clarifies that a tax identification number (TIN) is necessary, as well as a California Corporation number for those corporations qualified to do business in California. The remainder of the form is the same.

Septic Inspection, Well Inspection, Property Monument and Allocation of Costs Addendum (Revised)
The Septic Inspection, Well Inspection, Property Monument and Allocation of Costs Addendum has been modified to more accurately reflect whether the buyer or the seller will be paying for the costs related inspection and/or repairs to septic tanks, wells, and property monuments. It is anticipated that these revisions will provide for more accuracy as to who is doing what and will hopefully prevent any confusion or future issues.

Addendum (Revised)
The last revised form to be released on April 30, 2012 will be the Addendum. C.A.R. has simply removed the broker signature line. If the broker wishes to sign, he or she may use the prior form or insert his or her signature.

May Releases
The following revised forms will be issued in late May 2012. However, at the time this article was published, C.A.R. has not released a specific date.

Office Management Agreement (New)
The Office Management Agreement is a new form that reflects changes to California Business and Professions Section 10164 that become effective on July 1, 2012. Pursuant to the changes to the Code, (also discussed in our October Courtside Newsletter, “New Laws That May Affect Your Real Estate Business,” which can be found on our website), a broker who appoints a branch manager must do so pursuant to a written contract defining the responsibilities of that manager. There are further requirements, of course, as well as anticipated DRE regulation, but the purpose of C.A.R.’s new form is to provide a basic written contract according to the law. The Agreement contains language defining what offices the manager will oversee, his or her responsibilities, his or her salary, and other topics directly related to employment. It is to be used in conjunction with exhibits relating to internal office policies.

Broker/Associate-Licensee/Assistants Three-Party Agreement (Revised)
Section 5 of the Broker/Associate-Licensee/Assistants Three-Party Agreement has been revised to reflect recent changes in employment classifications. Now entitled “Employee Classification Advisory,” this section addresses the misclassification of independent contractors, stating “the classification of persons as employees or independent contractors is one the areas of the law that is complicated and risky.” The new law on this issue was addressed in our December Courtside Newsletter, “Warning to Employers: New 2012 Employment Laws,” which can be found on our website, www.glawgroupapc.com. The revisions to the Broker/Associate-Licensee/Assistants Three-Party Agreement serve as a warning to signees, letting them know that “independent contractor” has different definitions for different entities and the severe penalties of willful or unintended misclassification. The form also mentions the need to carry workers’ compensation insurance for an assistant.

Personal Assistant Contract (Revised)
The Personal Assistant Contract contains the same language with as the Broker/Associate-Licensee/Assistants Three-Party Agreement with regards to an “Employee Classification Advisory.”

It is important to seek the advice of competent legal counsel if any of the new forms are confusing or you have any questions whatsoever. It is always better to be safe than sorry.

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Last modified: October 16, 2020 at 2:22 pm | Originally published: April 25, 2012 at 9:57 am
Printed: November 24, 2020