On June 26, 2019, CAR will release three new forms and the following revised forms.
We will address the three new forms in a sequel Tip ( Part II) to be published next week.
NOTE: While prior versions of each form may be used, except where noted, it is always recommended to use the latest, most current and up-to-date forms.
AS – Seller’s Affidavit of Nonforeign Status: Accommodates and clarifies the procedure where a Qualified Substitute can obtain Seller’s tax information without also having to put such information into the AS form that is provided to Buyer. USE OF PRIOR VERSION OF THIS FORM IS NOT RECOMMENDED.
AVID – Agent Visual Inspection Disclosure: On Page 3, a new optional checkbox has been added to reference an addendum, if needed, to add information about rooms or locations not identified in the AVID.
BIE – Buyer’s Inspection Election: CAR has been advised that many Sellers’ Agents have been demanding that Buyers’ Agents supply this form even though there is no legal obligation to use this form. To deal with these erroneous requests, language has been added to the form explaining that the intended use of the form is only an instructional convenience between Buyer and Buyer’s Broker and that it is not a contractual document between Buyer and Seller.
BIW – Buyer’s Inspection Waiver: Like the BIE, because many Sellers’ Agents have been demanding this form from Buyers’ Agents (even though there is no legal obligation to use the form) language has been added explaining that the intended use of this form is between Buyer and Buyer’s Broker, and is not a contractual document between Buyer and Seller. Language also has been added to Paragraph 4 clarifying that a waiver also applies to additional investigations recommended by other reports.
BNA – Buyer (or Tenant) Non-Agency Agreement: Language has been added to make the form apply to Tenants as well as to Buyers.
MT – Modification of Listing, Buyer Representation or Other Agreement Between Principal and Broker: The title of this form has been changed to make the form easier to locate in zipForms. And, a provision has been added regarding commission negotiability to assure enforceability of an increase in compensation. USING THE PRIOR VERSION OF THIS FORM IS NOT RECOMMENDED.
NTT – Notice of Termination of Tenancy: Language has been modified to clarify the distinction between use of 30, 60 or 90-day notice. The Delivery of Notice section was modified to assure that required steps for substituted service and post/mail service are complied with. USING THE PRIOR VERSION OF THIS FORM IS NOT RECOMMENDED.
POSA – Buyer Pre-Occupancy Storage Addendum: Language has been added to obligate Buyer to pay for damages caused to both Seller’s real and personal property. USING THE PRIOR VERSION OF THIS FORM IS NOT RECOMMENDED.
PRACTICE TIPS FOR USING POSA: The Following Tips were noted when the POSA form was first released in December, 2018:
- It is generally not a good idea to allow a Buyer to store personal possessions in Seller’s Property prior to the close of escrow and should be done only as a last resort after documenting that both Parties have been advised that the Brokers are NOT recommending this practice.
- Paragraph 6 specifies that the Buyer is to provide the Seller with a complete list of all of Buyer’s personal property items being stored upon the completion of the move-in of the personal property.
- The POSA form should not be used unless there is a clear understanding of precisely what personal property items will be stored and not just the number of boxes or items.
- Both Sellers and Buyers should be advised, in writing, to consult with their own qualified California real estate attorney regarding potential liability issues prior to anyone signing the form.
- The Parties should also be advised, in writing, to consult with their own insurance representative to ensure that they have insurance coverage prior to anyone signing the form.
(See Weekly Practice Tip: “Buyer Storing Personal Property Prior to the Close of Escrow” which includes the Broker Risk Management equivalent form, “Pre-Close of Escrow Personal Property Storage Amendment.”
RCSD Forms: NOTE: Because of the changes to each of the four RCSD forms, only one RCSD form needs be used for each side of each transaction where a principal is signing in a representative capacity. Previously, for example, a separate RCSD-S form was required for the signing of the Listing Agreement, and a separate RCSD-S form was required for the signing of the purchase agreement. (Of course, a separate RCSD-B form would be required if a Buyer were signing in a representative capacity.)
RCSD-B – Representative Capacity Signature Disclosure (For Buyer Representatives): Form has been re-formatted so that the Buyer representative needs to sign only once even if the same form is used at the time of the signing of a Buyer Representation Agreement and also the signing of a purchase agreement. Language has been added for when the Buyer is a representative appointed by the probate court.
RCSD-LL – Representative Capacity Signature Disclosure (For Landlord Representatives): Form has been re-formatted so that the Landlord representative needs to sign only once even if the same form is used at the time of the listing and also the signing of the lease agreement.
RCSD-S – Representative Capacity Signature Disclosure (For Seller Representatives): Form has been re-formatted so that the Seller representative needs to sign only once even if the same form is used at the time of the listing, and also the signing of the purchase agreement.
RCSD-T – Representative Capacity Signature Disclosure (For Tenant Representatives): Form has been re-formatted so that the Tenant representative needs to sign only once even if the same form is used at the time of the Tenant Representation Agreement and also the signing of the lease agreement.
RFR – Receipt for Reports: Paragraph has been added for Tenant estoppel certificates.
SNA – Seller (or Landlord) Non-Agency Agreement: Language has been added to so that the form applies to Landlords as well as Sellers.
TA – Trust Advisory: Re-formatted so that trustee needs to sign only once even if form is used for the listing and the purchase agreement
TIP – Tenant in Possession Addendum: New language has been added giving Buyer the right to prevent Seller from making proposed changes to existing leases or tenancies. USE OF PRIOR VERSION OF THIS FORM IS NOT RECOMMENDED.
WEEKLY PRACTICE TIP: DO NOT FORWARD TO CLIENTS. This Weekly Practice Tip is for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.
© Copyright Broker Risk Management 2019 06/21/19