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Courtside Newsletter: New and Revised C.A.R. Forms in 2023

Published: December 18, 2023

WRITTEN BY: JOHN V. GIARDINELLI, ATTORNEY AT LAW | OF COUNSEL
& CRYSTAL PETERSON, ASSISTANT PROFESSIONAL STANDARDS ADMINISTRATOR


New and Revised C.A.R. Forms for December 2023
At the California Association of REALTORS® (C.A.R) business meetings in September 2023, the
Standard Forms Advisory Committee released the list of new and revised forms. This list includes one (1) new form, 38 revised forms, five (5) new and/or revised business forms, and three (3) new and/or revised short term (vacation) rental forms. Below is a summary of the forms and/or revisions you can expect to see released in December 2023.

1. BUYER HOMEOWNERS’ INSURANCE  ADVISORY (BHIA)  

This form highlights the significance of securing  property insurance, details the difficulty of  obtaining property insurance, the contract issues  that can impact insurance, and provides contact  information for the consumer’s questions on  insurance. C.A.R. strongly advises distributing the  form to a buyer promptly after establishing an  agency relationship.  

Property insurance is becoming increasingly  difficult to obtain due to California’s share of  natural disasters and the reality that some major  insurance companies have stopped or limited  writing new policies. This form allows agents to  address these issues up front.  

REVISED TRANSACTIONAL FORMS WITH  SUBSTANTIVE REVISIONS  

1. FOR YOUR PROTECTION: GET A HOME  INSPECTION (HID)  

This is a new form that basically replaces the  previous version, HUD Notice to Purchase, with  substantive content equivalent to the previous  version. This form is required for FHA transactions  and addresses the importance of a home  inspection prior to purchase.  

2. RESIDENTIAL LEASE OR MONTH-TO MONTH RENTAL AGREEMENT (RLMM)  

This form was updated to address the responsible  payor, whether housing provider or tenant, for  periodic pest control service that is already in  place. However, it is only applicable if the subject  property is a house.  

Additionally, revisions were added to advise the  housing provider and tenant that city, county, or  other local requirements imposed may apply to the  Agreement.  

3. SINGLE PARTY COMPENSATION  

AGREEMENT (SP)  

In this Agreement, revisions were made  throughout to conform to listing agreements.  These include updates regarding broker  compensation, agency relationships, dispute  resolution, management approval, and successors  and assigns to those in the listing agreement.  Additionally, the legally authorized signer and  signature paragraphs were updated to address  entity signers without need for the Representative  Capacity Signature Disclosure (RCSD).  

4. SELLER PROPERTY QUESTIONNAIRE (SPQ)  

With Accessory Dwelling Units (ADU) on the rise,  question 8D was added to address whether any  structure on the property is, in fact, an ADU, and  whether that ADU received permits and has  separate utilities. Question 18C was added to  clarify whether the property was constructed as a  manufactured or mobile home.  

5. SELLER’S PURCHASE OF REPLACEMENT  PROPERTY (SPRP)  

This addendum added language in 1A, 1C, and 4B  requiring the seller to give proof of having entered  into a contract to purchase or lease replacement  property if the seller removes the Finding  Replacement Property Contingency.  

6. TENANT ESTOPPEL CERTIFICATE (TEC)  

This form was completely reformatted to include a  grid making it easier to see the questions in  General Terms and allowing for additional space  for the answers that are completed by the tenant.  

7. TENANT OCCUPIED PROPERTY ADDENDUM  (TOPA)  

This form, used when selling tenant occupied 1–4- unit properties, added paragraph 2E(7) to address  the existing legal requirement of a seller to notify  

the buyer of the security deposit remaining and an  itemization of the use of the security deposit even  though paragraph 2A already requires the seller to  transfer the security deposit to the buyer.  

REVISED TRANSACTIONAL FORMS WITH  NON-SUBSTANTIVE REVISIONS  

1. BILL OF SALE (BOS)  

Per C.A.R., this updated Bill of Sale will provide  more flexibility regarding the condition of personal  property. The form added language to include  Joint Escrow Instructions and, if applicable, the sale  of the business operation described in the  Agreement. Paragraph 4A(D) was included to allow  for exceptions to seller representations. In  paragraph 4B(1) additional language was added to  include any express warranties.  

The form also removed the required notary  signature and made the notary signature optional.  Should a notary signature be required, the notary  will have to attach an appropriate  

acknowledgement form.  

REVISED TRANSACTIONAL FORMS WITH  NON-SUBSTANTIVE REVISIONS & NO DATE  CHANGE  

1. SELLER RESPONSE AND BUYER REPLY TO  REQUEST FOR REPAIRS (RRRR)  

In this form, language was added to clarify two  points: 1) the seller agreement is limited to the  items checked; and 2) the buyer agreement to

remove investigation contingencies requires the  buyer to either sign the RRRR or sign a CR form.  

2. ASSIGNMENT OF AGREEMENT  

AMENDMENT (AOAA)  

The only change in this form was the added  language to clarify that the buyer has not and will  not receive compensation for the assignment.  

3. COMMERCIAL PURCHASE AGREEMENT  (CPA)  

The only update to this form is the added language  to paragraph 14, which now includes both security  deposit and prepaid but unearned rent as possible  funds transferred to the buyer.  

4. NOTICE OF CHANGE IN TERMS OF  

TENANCY (CTT)  

Here, a notice to the tenant was added to inform  the tenant that once the Notice of Change has  been delivered, the change will take place with or  without the tenant’s signature.  

5. INDEPENDENT CONTRACTOR AGREEMENT  (ICA)  

The only change to this form was the updated link  to the California Code of Ethics and Arbitration  Manual, which went live in July.  

6. PROPERTY MANAGEMENT AGREEMENT  (PMA)  

This form changed the language in paragraph 6A to  make it clearer that some forms apply to clients  that are not California residents, or not qualified  entities, and some forms apply to those clients that  are California residents and qualified to do  business in California.  

Below is a list of revised transactional forms that  were reviewed by C.A.R. for accuracy and given a  new date:  

∙ Commercial Lease (CL)  

∙ Commercial Confidentiality and Non Disclosure Agreement (CML-CNDA)  

∙ Commercial – Environmental Issues  Addendum (CML-EIA)  

∙ Commercial – Landlord’s Environnemental  Consent (CML-LEC)  

∙ Commercial Release Agreement (CML-REL)  

∙ Delivery of or Failure to Deliver Short Sale  Lender Written Consent (DSSC)  

∙ Employee Estoppel Certificate (EEC)  ∙ Loan Broker-Sales Broker Disclosure (LBSB)  

∙ Mortgage Assistance Relief Services Offer of  Mortgage Relief Notice (MARSMRN)  

∙ Mortgage Assistance Relief Services Short  Sale Negotiation Notice (MARSSN)  

∙ Manufactured Home Dealer Addendum  (MHDA)  

∙ Mortgage Loan Disclosure Statement  Substitute (MSS)  

∙ Office Management Agreement (OMA)  ∙ Personal Assistant Contract (PAC)  

∙ REALTORS® Acknowledgement (RA)  

∙ REO Advisory (Listing) (REOL) – this was  reformatted to be consistent with Trust and  Probate Advisories  

∙ Radon Gas and old Notice and Release  Agreement (RGM)  

∙ Seller Owned Fictitious Business Name  Agreement (SOFBN) 

∙ Transaction Cover Sheet (TCS)  

∙ Broker/Associate-Licensee/Assistant Three Party Agreement (TPA)  

∙ Water-Conserving Plumbing Fixtures and  Carbon Monoxide Detector Notice (WCMD)  

∙ Water Heater Statement of Compliance  (WHS)  

∙ Water Heater and Smoke Alarm Statement  of Compliance (WHSD)  

NEW & REVISED BUSINESS FORMS  1. BUSINESS LISTING AGREEMENT (BLA)  

This form applies to a business only and not to the  real property on which the business is located. The  seller is to complete and allow the broker to  provide a Business Disclosure Statement to the  buyer. The form accommodates over 30 optional  elements for consideration, which includes  inventory, furniture, fixtures, equipment, leases,  social media accounts, goodwill, fictitious business  names, customer deposits and gift certificates, and  financial statements. Additionally, there is an  optional provision that allows for the request for a  confidentiality agreement to be signed by the  buyer.  

2. BUSINESS PURCHASE AGREEMENT (BPA)  

This form was updated to conform to the  Residential Purchase Agreement as much as  possible, including the updated grid. The updates  include the option to purchase a business with a  filed fictitious business name and the option to  purchase the real property the business operates  on at close of escrow.  

The type of loan defaults to an SBA loan, allowing  for the loan to be secured by the assets of the  business – furniture, fixtures, and equipment (FFE)  – but not inventory. An option to secure seller  

financing by a lien on other real property was  added as well. Additional contingencies will now  include loan, investigation of business,  environmental investigation, seller document,  lease review, licenses and permits, and a franchise  agreement.  

Finally, the revised form now makes the seller  obligated to make disclosures on a Business  Disclosure Statement and includes a seller’s  minimum consulting period with an optional non compete agreement.  

3. BUSINESS DISCLOSURE STATEMENT (BDS)  

The BDS allows the seller to document various  aspects of the business by using the same terms  specific in the BLA and BPA, such as inventory,  machinery, fictitious business names, logos, social  media, goodwill, financial statements, among  others. This form also allows for the identification  of approximate inventory value and lease terms,  facility description, notices of violation and  operational hours of business.  

4. BUSINESS PURCHASE – ALLOCATION OF  PURCHASE PRICE (BP-APP)  

This new, simple, one-page form was created in a  chart format to allow for the breakdown and  identification of the business for the purpose of  assigning value to each asset. C.A.R. recommends  that the buyer and the seller should each discuss  with appropriate professionals, such as a CPA or  tax attorney, to properly value the business assets.  

5. BUSINESS PURCHASE – FURNITURE,  FIXTURES, AND EQUIPMENT (BP-FFE)  

Another new, one-page form in chart format was  developed to identify the tangible assets of the 

business and assign an estimated value to each  item. 

NEW & REVISED SHORT TERM (VACATION)  RENTAL FORMS  

1. SHORT-TERM RENTAL LISTING (STRL)  

The former vacation rental listing form was  renamed and overhauled to include many  important updates. This form is to be used when  intended occupancy is either 30 days or less, or a  seasonal rental between 31 and 90 days. While the  form default is that the broker will not manage the  property, it does offer the option of having the  broker manage the property if a management  agreement is provided.  

The Listing Terms now allocates for different rental  periods and rates, which can include different rates  for different days of the week, times of the year,  and holidays. This section also directs the broker  to use the appropriate additional forms based on  the days of occupancy. (C.A.R. does note that 30  days is the maximum occupancy allowed for the  collection of transient occupancy tax with some  cities more restrictive, and, therefore, traditional  landlord-tenant rules should not apply.)  Additionally, this section also breaks down items or  rooms that may be included or excluded from the  rental and any additional terms that may apply,  such as community amenities or utilities provided.  

Owner-reserved dates have been expanded to  allow the owner to reserve additional occupancy  dates by giving notice to the broker. Numerous  revisions were made to the compensation to  broker section, which now includes the option that  allows the broker to be compensated if an  occupant obtained during the listing period  subsequently purchases the property.  

The section on deposits was revised completely to  clarify the deposit depending on the duration of  the occupancy and who payments will be payable  to. New language was included in the sections  

regarding Multiple Listing Service and Security and  Insurance to include specifics. Additionally, new  language was added to include the owner’s  authority to lease or rent the property as a short term rental with provision of license or permit  number from the city or county, and, if the  property is located within an HOA, confirming that  the rental will be consistent with the HOA rules.  

New language was added to the sections on tax  withholding and broker and owner’s duties which  now includes that the owner will complete a Rental  Property Owner Disclosure for rentals that exceed  30 days. Attorneys’ fees were added and  substantial language to dispute resolutions was  included.  

Finally, C.A.R. included warnings in the title and  broker signature section cautioning that the form is  not binding unless it is signed by the broker or  office manager.  

2. SHORT-TERM RENTAL AGREEMENT (STRA)  

This form, intended for occupancies of 30 days or  less only, has been revised to include an advisory  to use the Seasonal Addendum for occupancy not  

to exceed 90 days. The most common up-front  fees were addressed and identified to include  booking deposit, damage (not security) deposit,  and transient occupancy tax. Language was  updated to reflect that the return of a damage  deposit will follow the same process as the security  deposit in tenant rentals. Updates regarding  animals include the requirement for the form  Animals Terms and Condition Addendum (ATCA).  

3. SHORT-TERM RENTAL AGREEMENT –  SEASONAL ADDENDUM (STRA-SA)  

This form, intended for occupancies of more than  30 days but not to exceed 90 days, was developed  to modify the STRA to address landlord-tenant laws that are likely to apply. The damage deposit is  limited to three (3) months’ rent for a furnished  unit and rental payments cannot exceed the first month’s rent in advance, so payments for fees such  as a booking deposit, cleaning deposit, or advance rent will automatically be treated as an additional  damage deposit. Statutory rental disclosures are  identified and may obligate the owner to complete a Rental Owner Property Questionnaire (RPOD) for additional disclosures.  

CONCLUSION  

Should you have any questions or concerns regarding these forms, we encourage you to seek  qualified counsel through an attorney for answers.


Last modified: December 18, 2023 at 11:08 am | Originally published: December 18, 2023 at 11:08 am
Printed: June 16, 2024