On June 26, 2019, CAR released their revised forms. We have discussed the revised forms in a prior Tip (Part I). That same day, CAR released the following three NEW forms.
PAPA -Purchase Agreement Probate Addendum: This Addendum addresses the unique terms related to a property that is part of a probate estate (or conservatorship or guardianship). The PAPA has been designed to be used with any type of CAR purchase agreement for any type of property.
The PAPA should not be used with either the SFAR Purchase Agreement form or the PRDS Purchase Contract because this Addendum references specific paragraphs in the Residential Purchase Agreement (CAR form RPA) and the Residential Income Property Purchase Agreement (CAR form RIPA).
PRACTICE TIPS FOR USING PAPA:
- Paragraph 2 references two important forms that must be used at the same time that this Addendum is signed: The Representative Capacity Signature Disclosure for Seller Representatives (CAR form RCSD-S) and the Probate Advisory (CAR form PA).
- It is generally “assumed” that if the probate estate is being handled pursuant to the Independent Administration of Estates Act (“IAEA”) that court confirmation is not required; however, if a beneficiary/heir objects to the sale, then court confirmation is required. Thus, if the representative of the estate indicates that court confirmation is not required and the Parties use option 3-B(3) in the PAPA, that entire paragraph should be carefully reviewed by the Buyer before that paragraph is initialed.
- It often takes considerable time to set a date for court confirmation and Buyers who have time constraints should be warned that there is no viable way to predict precisely when court confirmation will occur (let alone whether the court will approve the sale). Thus, Buyers should be warned that there may well be a significant delay in closing escrow.
- Buyers should be urged to carefully review the CAR Probate Advisory and all parts of Paragraph 4 regarding court confirmation to better understand not only the court confirmation process but also the probate rules regarding setting the purchase price, over-bids at court confirmation hearings, and the removal of contingencies.
- Buyers and their Agents should attend the court confirmation hearing.
- Buyers should also be warned that the provisions in the Purchase Agreement regarding Liquidated Damages, Mediation and Arbitration are automatically deleted when using the PAPA form (see Paragraphs 5 and 6). Buyers who have questions regarding these issues should be urged to consult with their own qualified California real estate attorney.
PVR – Photo and Video Release: This form is a general release protecting real estate licensees who wish to use images of adults, children or pets for marketing of property as well as promotion of the real estate licensee and their business. The form is to be signed by adult humans (either for themselves or on behalf of minor children and/or pets).
WDFA – Wild Fire Disaster Advisory: This Advisory addresses the major problems and issues of concern when buying or renting property in an area that has been affected by wildfire. Use of the form puts Buyers and Tenants on notice that there has been a wildfire, the various potential impacts that a prior wildfire can have on federal, state and local resources, and the form provides a general list of websites for additional information.
One unfortunate reality in the aftermath of wildfire devastation is that it is more difficult and much more costly to obtain homeowners’ or renters’ insurance. Paragraph 3D in the WDFA is an excellent reminder to Buyers and Tenants that they must investigate the availability of insurance coverage at the earliest stage of the transaction.
PRACTICE TIPS FOR USING WDFA:
- This Advisory has been designed to be used with the Buyer Inspection Advisory (CAR form BIA) and the two forms are bundled together on the zipForm platform; these two Advisories should be used at the same time (i.e., at the time the Buyer’s Offer is prepared).
- This Advisory should not be used in counties where there have been no “wildfires.”
- Some local Associations of REALTORS®, such as NorBAR (that serves multiple counties, including Napa and Sonoma) have already developed their own Wildfire Advisory for their respective areas and those local Advisories can be used instead of the WDFA.
- One topic not addressed by the WDFA is that if there is a period of heavy rain following a wildfire (as was unfortunately true in Santa Barbara County), mudslides and debris flow can cause loss of life and property. Agents selling properties in areas affected by mudslides and debris flow need to disclose those additional facts as part of their agent disclosure (preferably using the CAR AVID). Buyers in those areas should be encouraged, in an email or other writing, to obtain any and all available public maps detailing debris flow risk areas.
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.