BY: JOHN V. GIARDINELLI, ATTORNEY AT LAW | OF COUNSEL
BRADLEY GREENMAN, ATTORNEY AT LAW
New & Revised C.A.R. Forms | June 2023
As some readers may recall from previous articles posted to the newsletter, California Real Estate Law is in a constant state of fluctuation. At the beginning of this year, we wrote about changes to forms promulgated by the California Association of REALTORS® (“C.A.R.”). Now, six months into 2023, this newsletter notes additional important changes to a number of forms that will impact professionals and clients alike. Much like our articles noting the changes in December 2022, the June changes range from minor organizational and formatting changes to more substantial adjustments. Additionally, there is some continuity the forms the C.A.R is revising. As the reader will see, many of the forms being updated in June were also updated at the end of 2022. We will indicate forms being changed again with an asterisk. Note: information about the changes noted in this newsletter comes directly from C.A.R.
RU-PA – Residential Units Purchase Addendum
This is an entirely new form being used with the Commercial Property Agreement form (or “CPA”) or the Vacant Land Purchase Agreement (or “VLPA”) forms. It is to be used in transactions involving a “mixed-use” property when the use of that property is primarily commercial in nature. Mixed-use property being property which functions as for both commercial and residential use.
Buyer Representation and Broker Compensation Agreement (or “BRBC”)*
This form was new and first implemented in December 2022 and was a combination and merging of previous forms. (See, Tyler Law LLP, (Dec. 20, 2022) [discussing the then new BRBC form].) For the June update to this relatively new form, the modification merely adds contact information for buyers on the signature page.
Cancellation of Contract, Disposition of Deposit and Cancellation of Escrow (or “CC”)*
Here, the form was updated in December 2022 which minor changes were made to time frames for a recipient to respond to an offer to mutually cancel the agreement. For the June updates, instructions were added concerning how to fill the form out if the cancellation is independent verses how to fill the form out if the cancellation is mutually agreed to. Additionally, new language was included addressing a partial release where no deposit had been made.
Cash for Keys (or “CFK”)
Changes to this form were actually made in April 2023. An important adjustment was made adding a warning that legal counsel needs to be sought to advise the housing provider to examine local laws concerning self-help evictions and advising the the housing provider not to use self-help remedies. Additionally, language was added to give notice the form is not just an offer of the housing provider to pay for relinquishment of the premises, but it is also an offer of the tenant to surrender possession according to the terms. These changes were based on a recent court decision.
New Construction Purchase Agreement (or “NCPA”)
Among some of the more substantial changes made to the C.A.R. forms, include the changes made to the NCPA. Stricter language was added to this form noting the seller must complete construction and provide the buyer with a certificate of occupancy by the date agreed for the closing of escrow. Further, if the property sale does not close, and the buyer is without fault, the buyer now has the explicit right to cancel the sale or elect to continue. Multiple paragraphs were also edited to include that statutory warranties under California Civil Code, section 895 et seq (also commonly referred to as “SB 800 Warranties”), are applicable to all sales.
Statewide Buyer and Seller Advisory
Language was added to this form to explain the purpose and nature of preliminary report and the importance of reading the documents contained therein. There were also notices added to inform parties that various State and local jurisdictions have/will be implementing laws which prioritize the use of appliances and fixtures that are fueled by the power grid as opposed to using carbon-based fossil fuels. In a similar vein, language was added to inform parties of the reduction or change in amount of credits and charges applied to properties related to their contributions to the solar grid. Language giving notice of the right to have discriminatory covenants removed from title was also added to this form.
Seller Counter Offer (or “SCO”)*
While the December 2022 revisions rendered use of older versions incompatible with the updated form, the June 2023 revisions are not as substantial. Here, an example is added to help explain the effect of a price change in a counteroffer has on an appraisal gap with the original offer.
Seller Multiple Counter Offer (or “SMCO”)*
Here, the June 2023 changes to the SMCO mirror in exact fashion the changes made to the SCO form (much like the December 2022 changes to both forms were mirrors of each other). Namely, an example is added to help explain the effect of a price change in a counteroffer has on an appraisal gap with the original offer.
Solar Advisory and Questionnaire (or “SOLAR”)*
This form, which was a new addition to C.A.R.’s stable of forms in December 2022, adds clarifying language to the information that sellers are required to provide buyers concerning any solar systems attached to the property. A new paragraph serves as a catch-all for any material fact the seller needs to disclose about the system to the buyer.
Seller Payment to Buyer’s Broker (or “SPBB”)*
Another change to a form which was not used prior to this year, instructions were added to clarify when the form is needed. Under the new language, the form only needs to be used if a buyer representation agreement has already been executed and the compensation through the Multiple Listing Service (“MLS”) will not cover the entire payment from the buyer to the buyer’s broker. Additionally, the first three paragraphs now have titles.
Tenant Occupied Property Addendum
Here, the June updates add language which creates an obligation for the seller of residential property to identify the names of any adult occupants on the property, regardless of if the adults on the property are paying rent.
Property Management Forms
Animal Terms and Conditions Addendum (or “ATCA”)
The substantially new ATCA form revises and replaces the C.A.R.’s previous Pet Addendum (or “PET”) form. This new version allows for use of the form for service or support animals (not deemed “pets” by law) and for other pets that are unrelated to any disability status of the tenant. The form includes rules which apply to all pets but also includes rules which are specific to non-disability related pets.
Lease Listing (or “LL”)*
In December 2022, the changes to this form rendered previous versions incompatible, with the new June 2023 changes, the January updated form can still be used. The new updates now require the owner to provide the agent both a Rental Property Disclosure (or “RPOD”) and Rental Property Owner Questionnaire (or “RPOQ”) (formerly the RPOD and RPOQ were one form) while only requiring the owner to provide the RPOD to the tenant.
Property Management Agreement (or “PMM”)*
Similar to the changes of the LL which were made in December 2022, changes to the PMM earlier this year rendered older versions incompatible with the updates earlier this year. These June 2023 updates are compatible with the December 2022 version. Here, similar to the June 2023 changes for the LL, the updated form requires the owner to provide the agent with both the RPOD and RPOQ forms (formerly the RPOD and RPOQ were one form) while only requiring the owner to provide the tenant with the RPOD form. Further, the new changes allow the broker or office manager to sign the form.
Residential Lease or Month-to-Month Rental Agreement (or “RLMM”)*
This form was brand new as of December 2022. Here, a minor change has been made to the disclosures language now only requiring disclosures applicable to the premises.
Rental Property Owner Disclosure (or “RPOD”)*
This form was also introduced in December 2022 as the rental equivalent of a Seller Property Questionnaire (or “SPQ”.) While the substance is similar to the December 2022 version, it has now been split into two separate forms, the RPOD and RPOQ.
Disclaimer: This article is intended as a general topical analysis of easements and the effects they can have on real property. Readers should consult a licensed and qualified attorney regarding any specific issues or scenarios they are facing regarding easements or other encumbrances of real property.