In this issue of Quick Tips:
- Disclosures for Two Co-Trustees
- Can a Buyer Order a CalFire Home Inspection During Escrow?
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- Disclosures for Two Co-Trustees.
Q: I am a listing agent where the property is held in trust and there are two Co-Trustees. The Trust is a revocable trust and neither of the two Co-Trustees has previously been on title in their own name. One Trustee has lived in the property for the past year, but the other lives out of state, knows nothing about the property and is refusing to sign the TDS and CAR Seller Property Questionnaire. What can I advise?
- Disclosures for Two Co-Trustees.
A: When dealing with two Sellers, you must deal with each seller separately. Here, one Seller is not exempt from completing the TDS and the other, who has never occupied the property, is exempt and can just complete an Exempt Seller Disclosure.
Remember, if a Seller is exempt from completing a TDS, that Seller should not do so.
For more information, see these Tips:
“Sale of Property Held in Trust – Disclosures” 10/05/18
“Exempt Seller Disclosures – The Right Way” 6/04/21
- Can a Buyer Order a CalFire Home Inspection During Escrow?
Q: I represent a Buyer in contract on a CAR RPA form. The Buyer has their investigation contingency in place and wishes to order an inspection of the Property through CalFire. Can Buyer order such an investigation and report”
A: A Buyer cannot order a CalFire inspection of the property without the permission of the Seller. Paragraph 12C of the CAR Residential Purchase Agreement prohibits a Buyer from ordering any inspection or report by a government employee without Seller’s permission. (There is a similar provision in Paragraph 16.E of the PRDS contract. The SFAR contract has no similar provision.)
Also, before a Seller is required to provide Buyer with the FHDS form:
1.For Fire Hardening, paragraph 3 of the FHDS form: (A) The property must be in a high or very high fire severity zone; (B) The Seller must be required to provide a TDS; AND (C) the property must have been built prior to 2010.
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- For Defensible Space, paragraph 4 of the FHDS form, both A and B but not C above must apply.
While theoretically a Buyer could make it a contract contingency for Buyer to obtain and approve a CalFire Inspection Report (which Seller implicitly approves by signing a contract with this contingency), the problem is that CalFire does not have the ability to conduct inspections in most of the state at this time and, in areas where they are able to do so, there may be substantial delays which would be longer than the escrow period.
Note: Paragraph 3 or 4 of the FHDS should be completed by a Seller ONLY IF the above criteria for that paragraph are met.
For more details, see the CAR Legal Q&A on this topic at: https://www.car.org/riskmanagement/qa/disclosure-folder/Defensible-Space-Law
DO NOT FORWARD TO SELLERS OR BUYERS. 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.
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