Your Guide To The California Residential Purchase Agreement

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Your Guide to theCalifornia ResidentialPurchase Agreement& Related FormsPublished and distributed byREAL ESTATE BUSINESS SERVICES, INC.a subsidiary of theCALIFORNIA ASSOCIATION OF REALTORS 525 S. Virgil Avenue, Los Angeles, CA 90020(213) 739-8227 FAX (213) 480-0864store.car.org

USER PROTECTION AGREEMENTThe California Association of REALTORS (C.A.R.) stands behind its coveredpublications* by assisting the user of such publications in defense of any claim, on appeal,that any pre-printed provision of the latest version of the C.A.R. covered publication isunlawful. This Agreement applies only to the latest version of the publications used inproperty transactions in California by REALTORS who have obtained or purchasedthe publications consistent with C.A.R.’s copyrights and from a C.A.R. authorizeddistributor. This Agreement means solely that C.A.R. will argue that the contents of thecovered publications are lawful, or that they accurately reflect the statutory, regulatory orgovernmentally-approved version of the publication, through an amicus curiae brief onappeal, or will provide funding for that portion of the appeal attributable to the lawfulnessof the publication, or both, in the discretion of the C.A.R. Legal Action Fund Trustees. Ofcourse, this does not apply to the manner in which a person provides a publication or usesit in a transaction but rather to the lawfulness of the pre-printed content of the publicationitself.*Covered publications include only those written by C.A.R. and those required or permittedto be given in transactions by statute, where the language of the booklet is mandatedby statute, regulation or government agency. Covered publications do not include thosepublications written by outside authors that may be distributed by C.A.R.Copyright 2005-2014, California Association of REALTORS . Published by Real EstateBusiness Services, Inc., a subsidiary of The California Association of REALTORS , 525S. Virgil Avenue, Los Angeles, CA 90020. All rights reserved. No part of this bookmay be reproduced by any means, electronic or mechanical, without advance writtenpermission from the publisher.This publication is designed to provide accurate and authoritative information in regardto the subject matter covered. It is published with the understanding that the publisher isnot engaged in rendering legal, accounting, or other professional services. If legal adviceor other expert assistance is required, the services of a competent professional personshould be sought.

CONTENTSIntroduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1I.II.Examining the Contract - Point for Point (RPA-CA page 1)Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1. Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Examining the Contract - Point for Point (RPA-CA page 2)3.Financing (continued) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.Sale of Buyer’s Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.Addenda and Advisories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6. Other Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.Allocation of Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .334671318181920III.Examining the Contract - Point for Point (RPA-CA page 3)7.Allocation of Costs (continued) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228. Items Included In and Excluded from Purchase Price . . . . . . . . . . . . . . . . . . 23IV.Examining the Contract - Point for Point (RPA-CA page 4)9.Closing and Possession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2710. Statutory Disclosures (Including Lead-Based Paint Hazard Disclosures)and Cancellation Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29V.Examining the Contract - Point for Point (RPA-CA page 5)10. Statutory Disclosures (Including Lead-Based Paint Hazard Disclosures)and Cancellation Rights (continued) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11. Condition of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12. Buyer’s Investigation of Property and Matters Affecting Property . . . . . . . . .13. Title and Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29373840VI.Examining the Contract - Point for Point (RPA-CA page 6)13. Title and Vesting (continued) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4314. Time Periods; Removal of Contingencies; Cancellation Rights . . . . . . . . . . . 4315. Repairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48VII.Examining the Contract - Point for Point (RPA-CA page 7)16. Final Verification of Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4917. Prorations of Property Taxes and Other Items . . . . . . . . . . . . . . . . . . . . . . . . . 49

18. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5019. Representative Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5120. Joint Escrow Instructions to Escrow Holder . . . . . . . . . . . . . . . . . . . . . . . . . . 52VIII.Examining the Contract - Point for Point (RPA-CA page 8)20. Joint Escrow Instructions to Escrow Holder (continued) . . . . . . . . . . . . . . . . 5521. Remedies for Breach of Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5522. Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57IX.Examining the Contract - Point for Point (RPA-CA page 9)23. Selection of Service Providers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6124. Multiple Listing Service (“MLS”) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6125. Attorney Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6126. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6227. Equal Housing Opportunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6228. Terms and Conditions of Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6229Time of Essence; Entire Contract; Changes . . . . . . . . . . . . . . . . . . . . . . . . . . 6330. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6331. Expiration of Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65X.Examining the Contract - Point for Point (RPA-CA page 10)32. Acceptance of Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67Disclosure Regarding Real Estate Agency Relationship (AD) . . . . . . . . . . . . . . . 71Confirmation of Real Estate Agency Relationships (AC) . . . . . . . . . . . . . . . . . . . 74Possible Representation of More Than One Buyer or SellerDisclosure and Consent (PRBS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76Possible Representation of More Than One Buyer Disclosure and Consent (PRMB) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76Possible Representation of More Than One Seller Disclosure and Consent (PRMS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76Seller Financing Addendum and Disclosure (SFA) . . . . . . . . . . . . . . . . . . . . . . . . 80Increased Deposit/Liquidated Damages Addendum (RID) . . . . . . . . . . . . . . . . . 86Assumed Financing Addendum (AFA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88FHA or VA Notice and Addendum (FVA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90FHA/VA Amendatory Clause (FVAC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92Contingency for Sale of Buyer’s Property (COP) . . . . . . . . . . . . . . . . . . . . . . . . . 94Seller’s Purchase of Replacement Property (SPRP) . . . . . . . . . . . . . . . . . . . . . . . 96Addendum (ADM) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98Back-Up Offer Addendum (BUO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100

Court Confirmation Addendum (CCA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102Short Sale Addendum (SSA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104Septic Inspection, Well Inspection, Property Monument and Allocationof Cost Addendum (SWPI) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107Buyer’s Inspection Advisory (BIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110Probate Advisory (PAK) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112Statewide Buyer and Seller Advisory (SBSA) . . . . . . . . . . . . . . . . . . . . . . . . . . . 115Trust Advisory (TA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128REO Advisory (REO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131Short Sale Information and Advisory (SSIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . 134Notice of Private Transfer Fee (NTF) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139Seller In Possession Addendum (SIP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141Residential Lease After Sale (RLAS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143Interim Occupancy Agreement (IOA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149Tenant In Possession Addendum (TIP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156Lead-Based Paint and Lead-Based Paint Hazards Disclosure,Acknowledgement and Addendum for Pre-1978 Housing (FLD) . . . . . . . . . . . 158Real Estate Transfer Disclosure Statement (TDS) . . . . . . . . . . . . . . . . . . . . . . . 161Water Heater and Smoke Detector Statement of Compliance (WHSD) . . . . . . 165Natural Hazard Disclosure Statement (NHD) . . . . . . . . . . . . . . . . . . . . . . . . . . . 167Seller Property Questionnaire (SPQ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170Supplemental Statutory and Contractual Disclosures (SSD) . . . . . . . . . . . . . . 175Agent Visual Inspection Disclosure (AVID) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177Seller’s Affidavit of NonForeign Status and/or California WithholdingExemption (AS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181Buyer’s Affidavit (AB) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181Qualified Substitute Declaration of Possession of Transferor’s Affidavit ofNonforeign Status (QS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181Homeowner Association Information Request (HOA) . . . . . . . . . . . . . . . . . . . . 186Notice of Nonresponsibility (NNR) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189Contingency Removal (CR) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191Cancellation of Contract, Release of Deposit and Joint EscrowInstructions (CC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193Notice to Seller to Perform (NSP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195Buyer’s Inspection Elections (BIE) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197Buyer’s Inspection Waiver (BIW) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199Market Conditions Advisory (MCA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199Request for Repair (RR) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203Seller Response and Buyer Reply to Request for Repair (RRRR) . . . . . . . . . . 205

Notice to Buyer to Perform (nbp) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207Demand to Close Escrow (dce) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209Buyer Demand For Release of Deposit (BDRD) . . . . . . . . . . . . . . . . . . . . . . . . . 211Seller Demand For Release of Deposit (SDRD) . . . . . . . . . . . . . . . . . . . . . . . . . . 211Verification of Property Condition (Vp) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214Notice of Your Supplemental Property Tax Bill (spt) . . . . . . . . . . . . . . . . . . . . 216Representative Capacity Signature Addendum (RCSA) . . . . . . . . . . . . . . . . . . 218Assignment of Agreement Addendum (AOAA) . . . . . . . . . . . . . . . . . . . . . . . . . . 220Additional Signature Addendum Agreement (ASA) . . . . . . . . . . . . . . . . . . . . . . 222Confidentiality and Non-Disclosure (CND) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224Electronic Signature Verification For Third Parties (ESV) . . . . . . . . . . . . . . . . 226Seller Counter Offer (SCO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228Seller Multiple Counter Offer (SMCO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228Buyer Counter Offer (BCO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228Withdrawal Of Offer (WOO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232Cooperating Broker Compensation Agreement andEscrow Instructions (CBC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234Declaration Regarding Real Estate License and Tax Reporting (dlt) . . . . . . 236Additional Agent Acknowledgement (AAA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238Additonal Broker Acknowledgement (ABA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238Residential Purchase Agreement (RPA-CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251

INTRODUCTIONThis booklet will discuss the entire revised C.A.R. California Residential PurchaseAgreement and Joint Escrow Instructions (RPA) and related addenda. The purchaseagreement and related addenda contain the essential terms for the formation of a realestate contract. A copy of the RPA and the addenda referenced within it, and others, canbe found at the end of this booklet and should be used in conjunction with your reading.The Purchase Agreement is adequately detailed to address most issues involved in thepurchase and sale of real property. Extensive modification or drafting of additionalparagraphs may be considered to be the unauthorized practice of law and should beavoided.

2YOUR GUIDE TO THE CALIFORNIA RESIDENTIAL PURCHASE AGREEMENT

Examining the ContractSECTION- Point for Point (RPA-CA,Page 1)ITitleCALIFORNIAASSO CIATIONOF REALTORS CALIFORNIARESIDENTIAL PURCHASE AGREEMENTAND JOINT ESCROW INSTRUCTIONSFor Use With Single Family Residential Property — Attached or Detached(C.A.R. Form RPA-CA, Revised 11/14)The word “California” reflects the fact that the form is available for use throughoutDate Prepared:the state. The words “and Joint Escrow Instructions” reflect that the form includes1. OFFER:A. THIS IS AN OFFER(“Buyer”).anFROMinstructionto the escrow holder by both the buyer and the seller (see paragraphB. THE REAL PROPERTy to be acquired is , situated20) and includes space for the escrow holderto sign for receipt of the documentin(City),County, California,(Zip Code), Assessor’s Parcel No. (“Property”).(see page 10 of the contract).C. THE PURCHASE PRICE offered isDollars .The subtitlethe form is intended for use (date)(orwith singlefamilyD. CLOSE OF ESCROWshall occurindicatesonDayspropertiesAfter Acceptance).E. Buyer and Sellerthatare referredto hereinas theor“Parties.”Brokersare notthePartiesto thisAgreement.may beattacheddetached.Thus,formis forcondominiums as well2. AGENCy:as aPartieshouse.the ionships”as a duplex,(C.A.R.A. DISCLOSURE: TheeachIfacknowledgereceiptof a 4sold“DisclosureRegardingReal EstateForm AD).triplex or fourplex, then the user should consider using another form such as theB. CONFIRMATION: The following agency relationships are hereby confirmed for this transaction:Residential Income Property Purchase Agreement (C.A.R. form RIPA).Listing Agent (Print Firm Name) is the agent of (check one):the Seller exclusively; orboth the Buyer and Seller.Other formsare available for single family sales in specific situations. If theSelling Agent (Print Firm Name) (if not the same as thebeingsoldthebyBuyera decedent’sa conservatorguardian,Listing Agent) is propertythe agent ofis(checkone):exclusively; estate,or the Sellerexclusively; oror aboththe Buyerthenand Seller.4 “Possible RepresentationC. POTENTIALLy COMPETINGANDAgreementSELLERS: The(C.A.R.Parties eachacknowledgereceipt beof a considered.the ProbateBUyERSPurchaseformPPA) shouldIf aof More than One Buyer or Seller - Disclosure and Consent” (C.A.R. Form PRBS).personalpropertymobilehomeevena mobilehomethat has been converted to3. FINANCE TERMS: Buyerrepresentsthat fundswill be good orwhendepositedwith Escrow Holder.A. INITIAL DEPOSIT:Depositshallbeintheamountof. real property, the user is advised to consider the Mobilehome Purchase Agreement(1) Buyer Direct Deposit: Buyer shall deliver deposit directly to Escrow Holder by electronic funds(C.A.R.MHPA).If thehome is not yet built 3butwilldaysbe heck, otherwithinbusinessafter Acceptanceduring(or );escrow, especially in a subdivision, then the New Construction PurchaseOR (2)Buyer Deposit with Agent: Buyer has given the deposit by personal check (or )Agreementform NCPA) is appropriate. If themadepropertyownerlives inCALIFORNIAto the agent submitting the offer(C.A.R.(or to ptanceandthendepositedpropertyis facingforeclosure and thebuyer is an investorpurchaser, theRESIDENTIALPURCHASEAGREEMENTAtheL IwithinF O 3RbusinessN IandA dayswith Escrow CHolderafter

This booklet will discuss the entire revised C.A.r. California residential Purchase Agreement and Joint Escrow instructions (rPA) and related addenda. The purchase agreement and related addenda contain the essential terms for the formation of a real estate contract. A copy of the rPA and the addenda referenced within it, and others, can

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