In December, CAR is releasing its new and revised forms. The following is a summary of the changes.
NEW
BHIA – Buyer Homeowner’s Insurance Advisory: This form is bundled with the RPA. It addresses issues with insurance availability, contract contingencies, and available resources.
NOTE: This buyer advisory supersedes and replaces our BRM “Advisory Regarding the Availability of Insurance.” BRM policy is to default to industry standard forms when possible.
REVISED
SHORT SALES ONLY: DSSC Delivery of or Failure to Deliver Short Sale Lender Written Consent: This form was reformatted, so that each of the three-paragraph options contains signatures applicable to that option regarding: 1) the short sale lender’s consent; 2) cancelation based on that consent; or an amendment agreeing to short sale lender’s requested changes.
FHA TRANSACTIONS ONLY: HID: HUD Notice to Purchasers: This form has been rewritten to comply with new FHA regulations. It is to be attached to the RPA if FHA if ¶3E(1) is checked. The FHA lender is required to provide this notice to the borrower.
LENDER REO SALES ONLY: REOL REO Advisory (Listing): This form is entirely revised to conform to formatting and order of paragraphs to Trust and Probate advisory forms.
MT Modification of Listing, Buyer Representation or Other Agreement between Principal and Broker: This form was updated to include a statutory limitation that renewal of exclusive listing which cannot exceed 12 months each renewal.
RLA Residential Listing Agreement – Exclusive
and
RLASR Residential Listing Agreement – Seller Reserved:
Both forms have been updated to include a statutory limitation that the maximum exclusive listing period cannot exceed 24 months and recording listing against the property is prohibited.
RLAN Residential Listing Agreement – Open: Paragraph 10B was updated to conform to the presentation of the offer paragraph in the RLA.
RR Request for Repair: On Page 2, the “Seller Response to a Partial Agreement” in ¶1B is modified to include optional paragraphs for credits and revised purchase price. This form was revised to conform to the RRRR form.
SP Single Party Compensation Agreement: ¶1 of the form now applies to a lease or sale. Significant revisions were made to ¶2B Representation. The following were revised to conform with these RLA paragraphs: ¶6 Dispute Resolution; ¶8 Management Approval, ¶11 Legally Authorized Signer and signature block.
SPQ Seller Property Questionnaire: Question 8D was added to address ADUs. ¶18C was added to indicate if the property was originally a Manufactured or Mobile home.
SPRP Seller’s Purchase of Replacement Property: Language was added to require seller to: 1) provide “proof” that seller actually has a replacement property as defined in ¶1A; and 2) allowing buyer to cancel if seller does not give proof or if the replacement property transaction fails.
TOPA Tenant Occupied Property Addendum: Paragraph 1B(3) now provides that if the property is to be delivered vacant, seller must identify how seller was able to get tenants to leave. New ¶1C was added if buyer is a tenant. ¶2E(7) was added to specify the existing legal requirement to identify itemized use of security deposits, if any.
WHS Water Heater Statement of Compliance: A note was added to clarify that this form is to be used when sellers are exempt from TDS since the water heater statement is still required.
WHSD Water Heater and Smoke Detector Statement of Compliance: A note was added for the use of this form with REO sales even though exempt from TDS.
RENAMED: WCMD Water-Conserving Plumbing Fixtures and Carbon Monoxide Detector Advisory: Changed title from “Notice” to “Advisory”
RENTAL/PROPERTY MANAGEMENT
NOTE: Commencing July 1, 2024, landlords may collect no more than one month’s rent for either furnished or unfurnished units in addition to first month’s rent. There is an exception for small landlords, defined as a landlord who is a natural person or LLC and owns no more than two residential rental properties with no more than a total of four units offered for rent. Lease/rental forms will be revised to reflect this change in the June 2024 forms release.
CL Commercial Lease Agreement: ¶ 34 Construction-Related Accessibility Standard paragraph was added to this contract form and removed as a stand-alone addendum.
LRA Application to Lease or Rent/Screening: Screening fee section II, ¶2B was updated to separately indicate if a full or partial screening fee is being paid by the tenant. The screening fee section was updated to allow for the receipt for this form to be made by email to the tenant.
PMA Property Management Agreement: ¶6A Tax Withholding paragraph was updated to make it easier to understand that different forms are required if the RPO is or is not a CA resident or corporation.
RLMM Residential Lease or Month-to-Month Rental Agreement: Paragraph 11G was updated to make clear that the periodic pest treatment paragraph only applies to “houses.” Insurance ¶ 29C was changed to only require a tenant liability policy to name the Housing Provider and Property Manager as additional interest parties, not additional insured. Paragraph 46 was added to advise both parties that local jurisdictions may require addenda to this agreement.
STRA Short-Term Rental Agreement VRA For 30 days or less: (The STRA-SA form will be needed as an addendum to this form for rentals from 31 to 90 days.) ¶5B was revised to list up-front payments section to include booking deposit, rent, damage deposit, cleaning fee, and transient occupancy tax. ¶11 Animals paragraph added to note no animals allowed except for comfort or service animals and then only with a signed CAR Animal Terms and Conditions Addendum (form ATCA). ¶12 No smoking paragraph was added.
NEW: STRA-SA Seasonal Addendum to Short-Term Rental Agreement: This form is used with the STRA for rentals between 31 and 90 days. It recognizes that seasonal rentals have some terms in common with short-term rentals and some in common with leases. The maximum deposit was conformed to lease agreements. Additional changes were made to Disclosures, including the use of the RPOD (¶6K), and to the Condition of Premises at commencement, including the possible use of MII form (¶4B and C).
STRL Short-Term Rental Listing – Completely redone form. Review before using: For use with an occupancy of 30 days or less, or a seasonal rental from 32-90 days. Form requires broker or office manager signature, not the rental agent. No property management will be provided unless checked. ¶2A allows for different rental rates based on length of rental. Rental agreement to be the STRA alone or with seasonal addendum. The owner represents that required permits have been obtained. Notes that rentals exceeding 30 days are treated differently.
TEC Tenant Estoppel Certificate: Reformatted to easier to use grid format. Three categories identified: 1) General Terms, 2) Utilities and Services, and 3) Appliances. The latter two make it easy to identify the is the responsible party, the tenant or the housing provider.
BUSINESS OPPORTUNITY
NEW: BP-APP Business Purchase – Allocation of Purchase Price: This form 1) identifies various assets being transferred and their assigned value; and 2) separates FF&E into taxable and non-taxable totals.
BDS Business Disclosure Statement: Revised ¶4 is now consistent with the BLA and BPA forms. ¶ 8 states that the books and records are those in the normal course of business. Added ¶9C identifying violation notices, ¶9D owner’s salary, and ¶G(2) a grid for hours of operation.
BLA Business Listing Agreement: ¶3 Documentation is updated to be consistent with BDS and BPA forms. The Agency, Dispute Resolution, Legally Authorized Signature, and the Signature paragraphs conformed to other C.A.R. listings. The arbitration clause has been removed.
BPA Business Purchase Agreement and Joint Escrow Instructions: The Business DBA names can now be added. ¶3 uses the grid format for negotiable terms. ¶3B(1) Default position is that Inventory is now included in the price unless the box is checked. ¶3B(2) Valuation of inventory can be made by a third party. ¶3F(2) optional real property security clause is added. More specifics on assets and liabilities. Seller disclosures are now consistent with BDS and BLA. ¶11C Seller shall provide a proposed allocation of the purchase price (form BP-APP). ¶21 Seller shall comply with bulk transfer laws. ¶1C if checked, purchase is contingent upon simultaneous purchase by Buyer of real property.
BP-FFE Business Purchase – Furniture, Fixtures, and Equipment NEW Itemizes FF&E. Seller must specify each item to identify its age, whether leased or owned, if taxable, and estimated value.
RENAMED: BP-ECET Business Purchase – Employee Certificate of Employment Terms: Renamed from Employee Estoppel Certificate. Added clause about additional employee benefits.
MINOR REVISIONS
TPA Broker/Associate Licensee/Assistants Three-Party Agreement: Updated reference to CAR Legal Q&A’s and DRE documents.
AOAA Assignment of Agreement Addendum: Optional consideration ¶3B added language to make clear that buyer has not, and will not, receive monetary consideration for any assignment.
CPA Commercial Purchase Agreement: Changed reference in ¶11C from SPQ/ESD to CSPQ. Clarifies that ¶14, Security Deposits, terms apply to prepaid but unearned rents.
CTT Change in Terms of Tenancy: Note added before tenant signature that change in the terms of tenancy will take effect even if tenant does not sign.
ICA Independent Contractor Agreement (with binding arbitration option): Updated reference to Code of Ethics and Arbitration manual.
RPA Residential Purchase Agreement: Drop down added in ¶3Q(2) for ordering a Fortress Fire Wildfire Disclosure Report.
RRRR Seller Response and Buyer Reply to Request for Repair: Language was added to ¶2 to make explicit that seller needs to sign RRRR form or alternative to be effective.
TDS Real Estate Transfer Disclosure Statement: Removed redundant seller initial blocks on page 2 since the Seller already signed that page.
TOA Text Overflow Addendum: Separate TOA forms are now available for different situations, so signature fields match the primary document.
RESOURCES
DRAFT COPIES OF ALL NEW AND REVISED FORMS ARE AT:
CAR Video on December 2023 Forms Release
https://players.brightcove.net/876630612001/ryhOqs35_default/index.html?videoId=6342422884112
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