Summary of Significant Changes to the RPA

Member Legal Services
Tel (213) 739-8282
Fax (213) 480-7724
Oct. 8, 2014
Summary of Significant Changes to Residential Purchase Agreement, RPA
The November 2014 version of the C.A.R. Residential Purchase Agreement (RPA) is ten pages long. The 2014 RPA has 32 numbered paragraphs and about 150 lettered paragraphs (Ex. 2A, 2B, 2C) in those ten pages. There is new or revised language in about half of the lettered
paragraphs. What follows is a chart summarizing some of the more significant changes to the November 2014 RPA when compared to the previous version of the contract, the April 2010 version. More information about these new or revised paragraphs can be obtained by
attending a class that has been approved for four hours of BRE continuing education credit. A schedule of classes can be found in the education tab on car.org.
Subject
Nov. 2014 RPA (New)
April 2010 RPA (Old)
Location (New)
Location (Old)
Date line
Date prepared
Date
Top left of page 1
Top right of page 1
Agency Disclosure
Pre-checked box for AD form
Page 1, paragraph 2A
Page 1, paragraph 2A
Pre-checked box means zipForm automatically includes form when RPA selected
Multiple Representation
Possible Representation of More
Than One Buyer or Seller, PRBS
Optional box for AD form
Disclosure and Consent for
Representation of More Than
One Buyer or Seller, DA
Page 1, paragraph 2C
Page 1, paragraph 2B
Change Title and Code for form. Slight reformat of form.
Option for cashier check or personal check in new form
Initial Deposit, Buyer Direct to Escrow
Comment / Explanation
Default to electronic fund transfer
Default to verification attached to
offer
Default to buyer personal check Page 1, paragraph 3A(i)
Page 1, paragraph 3A(1)
Default to verification in 7 Days
Page 1, paragraph 3C
Page 2, paragraph 3J
Refers to PAA
Page 1, paragraphs 3D(1) and (2)
Page 1, paragraph 3D(3)
Page 1, paragraph 3C(3)
Amendatory clause is an appraisal contingency for FHA/VA loans. See C.A.R. form FVAC.
Balance of Down Payment
Verification of Down Payment
Loan Applications
Refer to AFA, rather than PAA
Insert language referencing
amendatory clause, FVAC
Paid pursuant to escrow holder
instructions
Default to 3 Days
Default to 3 Days
Optional checkbox for verification to be made within 3 Days
Purchase Agreement Addendum removed from C.A.R. forms library. Assumed Financing
Page 1, paragraphs 3C(1) and (2) Addendum, AFA replaces relevant paragraph
Page 1, paragraph 3F
Page 2, paragraph 3H
Page 2, paragraph 3J(1)
Page1, paragraph 3E
Page 2, paragraph 3G
Page 2, paragraph 3H(1)
Letter based on qualifying rate not initial rate for adjustable loans.
Loan Contingency
Loan Contingency Removal
Insert language about independence
of loan and appraisal contingencies
Default to 21 Days
Default to 17 Days
Page 2, paragraph 3J(2)
Page 2, paragraph 3J(3)
Page 2, paragraph 3I
Page 2, paragraph 3H(3)(i)
Cannot use loan contigency to cancel contract if appraisal contingency removed but
appraisal below purchase price
Remove option for contingency to remain until loan is funded
Buyer Credits
Credits disclosed to buyer's lender
Page 2, paragraph 3J(5)
N/A
Credit cannot exceed that allowed by buyer's lender
Addenda and Advisories
Page 2, paragraph 5
Wood Destroying Pest Addendum, WPA, removed from C.A.R. forms library. Language
Page 2, paragraph 4A(1); Page 4, inserted into paragraph 12 for scope of inspection. Language inserted in Request for
paragraph 11
Repairs, RR, for buyer to ask seller to pay for Section 1 or Section 2 recommendations.
Septic and Well Inspections
Reference to SPQ moved to
paragraph 10. Remove option to
add WPA
Removed from Allocation of Cost
Paragraph
Page 2, paragraph 7A
Page 2, paragraph 4A(2)
NHD Reports
Basic report only, expanded report
optional
Page 2, paragraph 7A(1)
Page 2, paragraph 4A(4)
Page 2, paragraph 7C(1)c
N/A
Page 3, paragraph 7D(4)
Page 3, paragraph 7B
New law requires HOA to separate legally required docs from those only contractually
required.
Page 3, paragraph 7D(9)
Page 2, paragraph 4D(6)
Removed option for adding Code Upgrade optional coverage. Can use drop down menu
to select certain providers of these reports. Others can be written in blank as before.
Page 3, paragraph 8B
Seller must disclose leased or liened items and provide buyer with written
documentation. Seller must provide codes and passwords for automation systems but
not smart phones or tablets.
All Cash Offer
First and Second Loan
FHA/VA Loans
Escrow General Provisions
Paid within sufficient time to
close escrow
Default to 7 Days
Default to 7 Days
N/A
HOA Documents
Parties to sign and return in 5 Days N/A
Seller to pay for documents required
by law
Negotiable who pays
Home warranty plan
Option for buyer to waive. Standard
plan only. Upgrade is optional.
Items Included
Added water features,
washer/dryer, home automation
systems and leased or liened items
Page 3, paragraph 8B(4)
Can check box adding Septic and Well addendum, SWPI, in paragraph 5
Report to include tax information such as Mello-Roos. Check box for environmental
reports. Can use drop down menu to select certain providers of these reports. Others
can be written in blank as before.
Items Excluded
Possession
Furniture excluded if attached by
brackets. Optional box for brackets
to be removed.
Page 3, paragraph 8C
Page 4, paragraph 8C
Page 4, paragraph 9B
Page 3, paragraph 5B
Page 4, paragraphs 10A(1) and (2)
Page 3, paragraphs 6A(1) and (2) Buyer's broker still has to inspect and disclose.
Page 4, paragraph 10A(4)
Page 4, paragraph 11
SSD remains optional. Will rarely be needed except if Seller exempt from TDS.
Page 5, paragraph 10F
Page 3, paragraph 7
Page 5, paragraph 12
Page 4, paragraph 10
Seller previously had no obligation to put funds into escrow.
Includes who can perform inspection, what will not be inspected, requirement that
report be prepared and that report be separated into section 1 and section 2
recommendations
Page 6, paragraph 14A and D
Page 5, paragraph 14A and B
Seller has 2 Days to perform
N/A
Seller only had to provide
invoices
Page 6, paragraph 14G
Page 5, paragraph 14F
Buyer or seller must first give proper cancellation. Buyer or seller must give escrow
demand for release (New C.A.R. forms BDRD or SDRD). Other party has 10 days to object.
Page 7, paragraph 16
Page 5, paragraph 15
N/A
Page 7, paragraph 19
N/A
Buyer Investigation
Default to 6pm on COE date
Default to 5pm on COE date
Fully completed means seller and
listing broker section completed and
signed
Contractually required if seller has to
complete TDS
Optional only
Party specified must put money into
escrow
Added language establishing
parameters of wood destroying pest
inspections
Notice to Seller to Perform
Required before buyer can cancel if
seller does not deliver documents
Form was optional only
Statutory disclsoures
Seller Property Questionnaire, SPQ
Condo/Planned Develop. Disclosures
If brackets removed, seller to repair damage but not paint.
Additional time accomodates late closings. Seller must move out even if last day for
possession is Saturday, Sunday or legal holiday.
N/A
Page 7, paragraph 20A
N/A
FIRPTA compliance
Process created whereby money
may be released from escrow
without mutual signed instructions
Seller must provide paid receipts for
work performed
If signing for another, must attach
form, RCSA, and provide proof of
authority to act
Parties to sign and return in 5 Days /
Party to pay within 3 Days
Escrow to provide buyer with
Qualified Substitute form, QS, if
given seller's affadavit, AS
N/A
Page 7, paragraph 20B
N/A
Duty found in 7C(1)c / Duty found in 7 and 10
If escrow holder is broker escrow and broker represents seller, then QS not applicable. In
that case try giving AS to to title company and asking for QS or will need buyer to get
completed AS to comply with FIRPTA.
Mediation
Defaults to C.A.R. Real Estate
Mediation Center for Consumers
No default
Page 8, paragraph 22A
Page 7, paragraph 26A
C.A.R. Mediation Center mediators are vetted by C.A.R. and trained in purchase
agreement and effect of clauses most likely to be relevent to resolving disputes.
Assignment
Buyer cannot assign without seller's
consent
N/A
Page 9, paragraph 26
N/A
Seller cannot unreasonably withhold consent. Consent must be to a specific assignee
who is named. Assignment does not release buyer from liability. New C.A.R. form AOAA.
Acceptance subject to counter
New form, SCO, for seller initiated
counter offer
Page 8, paragraph 30
Counter Offer, CO, form being removed from C.A.R. library. Replaced by seller counter
offer, SCO, and buyer counter offer, BCO. Seller multiple counter offer, SMCO, remains.
Return of Deposit
Repairs
Representative Capacity
Escrow General Provisions / Payment for
HOA documents
Only referenced generic counter
offer, CO
Page 10, paragraph 32
Proof of authority must be provided within 3 Days After Acceptance whether buyer or
seller acting in representative capacity
Q Where can I obtain additional information?
A This legal article is just one of the many legal publications and services offered by C.A.R. to its members. For a complete listing of C.A.R.'s legal products and services, please visit car.org/legal.
Readers who require specific advice should consult an attorney. C.A.R. members requiring legal assistance may contact C.A.R.'s Member Legal Hotline at (213) 739-8282, Monday through Friday, 9 a.m. to 6 p.m. and Saturday, 10 a.m. to 2 p.m. C.A.R. members who are brokerowners, office managers, or Designated REALTORS® may contact the Member Legal Hotline at (213) 739-8350 to receive expedited service. Members may also submit online requests to speak with an attorney on the Member Legal Hotline by going to
http://www.car.org/legal/legal-hotline-access/. Written correspondence should be addressed to:
CALIFORNIA ASSOCIATION OF REALTORS®
Member Legal Services
525 South Virgil Avenue
Los Angeles, CA 90020
The information contained herein is believed accurate as of October 8, 2014. It is intended to provide general answers to general questions and is not intended as a substitute for individual legal advice. Advice in specific situations may differ depending upon a wide variety of
factors. Therefore, readers with specific legal questions should seek the advice of an attorney. Written by Neil Kalin, Esq.
Copyright© 2014 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). Permission is granted to C.A.R. members to reprint this material in hardcopy or PDF format only for personal use or with individual clients. This material may not be used or reproduced for commercial
purposes. Other reproduction or use is strictly prohibited without the express written permission of the C.A.R Legal Department. All rights reserved.

Download Report