COMPARISON CHART 2013 PRDS CONTRACT 2013 CAR CONTRACT CAR #

Transcription

1 PRDS # PRDS PROVISION Introductory Paragraph ( ) COMPARISON CHART 2013 PRDS CONTRACT 2013 CAR CONTRACT PRDS APPROACH Identifies Parties, Purchase Price and Property Address 1 Agency Acknowledges Receipt of Disclosure & Confirmation of Actual Agency Relationships CAR # CAR PROVISION 1 Identifies Parties, Purchase Price, Property & COE 2 A. Receipt of Disclosure Form; B. Competing Principals; and C. Confirmation ANY DIFFERENCE Format PRDS retains original. CAR uses a list and includes COE date PRDS Does Not Reference Competing Principals Not needed in Contract. Both CAR & PRDS reference use Separate Disclosure Form Buyer Represents that funds 2 Financing Terms 3 Finance Terms & Good Funds are good when deposited 2A Deposit Buyer to deposit funds 3A Initial Deposit Same options for form of with Escrow holder 3 deposit but Buyer must options for form of specify how the funds will deposit inc. electronic get delivered to escrow 2B Additional Deposit Same format as 2A 3B Increased Deposit Limits means of deposit to 2C Balance of Down Payment Buyer to deposit funds 3E Balance of Purchase Price 2D Loan Conventional or 3C Loan(s) First, Specify Type of Loan -- Second Limited Loan Terms need to be specified 2E Other Financing References PRDS 3D Additional Other Fin. Addendum Financing See 6B 2F Seller Financing References PRDS Seller Fin. Addendum See 6A 3C-1 3C-2 Seller Financing is an Option For 1 st & 2 nd Loans 2G Total Purchase Price 3F Purchase Price (Total) 2H Buyer s Loan Default is Buyer delivers 3H Loan Obligations letter with contract. Terms 3H-3 Loan Contingency 2I Financing Contingency Explains concept with Reference to Time Frame See 8A; Explains effect of seeking other loans; Cautions Buyer to verify w/lender before removing contingency contingency automatically includes appraisal component even if no separate appraisal contingency. 3K Seller reliance on stated loan Buyer -- same as PRDS No specificity as to how funds are to be deposited Different Order For How Loans are Identified; CAR Has Time Frame For Lender Req. Repairs in FHA/VA CAR has no reference to another document; simply provides blank lines No specific 2 nd Loan provision in PRDS CAR has no reminder re not including closing costs CAR has more information & default is 7 days. CAR specifies 2 options: No.Cal choice is default So Cal Contingency remains until loan funded. PRDS clearer statement of effect of seeking other loans; CAR has no verification warning to the Buyer.

2 3 Appraisal Reference to Time Frame for inclusion. See 8B. Specifies which appraisal controls 4 Buyer s Funds Verification of Buyer s financial obligations to Close; Good Funds 5 Fixtures, Fittings & Personal Property 5A Items Included Listed Standard PRDS re Existing fixtures/fittings 3I Appraisal Contingency & Removal CAR default is Appraisal Contingency included; 3 different options for timing of contingency 3J All Cash Offer Not needed in PRDS form 3G Verification of Down Payment & Closing Costs 8 Items Included & Excluded from Purchase 8B- 1& 2 Items included 5B Additional Items Included in the sale Check Box Chart 8B-3 Blank Line for Additional Items 5C Items Excluded from sale Blank lines no pre-set 8C Preset Excluded excluded items Items plus blank 5C Excluded NOTE Seller repairs after removing mounting brackets 5D CAUTION Items noted in Ads, MLS 8A NOTE to Buyer & TDS are not included and Seller unless noted in Contract 6 Additional Contract Preset list of PRDS 11B Preset List of 6C 6E Documents PRDS Common Interest Development Sale of Property Addendum Addenda & other PRDS References need for separate HOA Addendum which sets out Seller s disclosure duties & timing PRDS References Separate Addendum for Buyer Contingency to Sell Other Property 7 Other Terms & Conditions 8 Contingencies All contingencies listed and are only included if a Time Frame is inserted 9A Close of Escrow Specify date 2 options Defined as recordation of deed & delivery of keys 9A Possession Date Options - Either same as COE or different date then contract is subject to Occupancy Agreement See 6D 9B Intent to Occupy Default Does intend to occupy CAR Addenda 7 Seller Obligation to Disclose if there is an HOA and timing on disclosures 13 Sale of Buyer s Property Default is no contingency; CAR COP form PRDS default is 5 days; CAR default is 7 days Listed Differently; PRDS has Smoke & CO detectors Note small check boxes for Stove(s) & Refrigerator(s) CAR has no Chart CAR audio and video automatically excluded CAR no Seller repair obligation if Seller removes TV and/or other mountings CAR s Note is same as PRDS Caution except CAR does not reference TDS Completely different Addenda are listed CAR includes the HOA material that is in PRDS Addenda; both contracts still requires separate document to make HOA disclosures PRDS - automatically not contingent unless 6E is checked and PRDS Addendum fully signed 2+ Blank lines 11D Other Terms CAR has less space for other terms No Specific List of Contingencies in One Place in CAR 1D Close of Escrow Same options but not defined until 22C with no reference to delivering keys 5B 5A Options - Either same as COE or different date Default Does intend to occupy CAR Only Advises having an occupancy agreement & getting ins. Advice rather than incorporating the Occupancy Agreement PRDS has separate which stands out; CAR provision is hidden

3 10 TDS & Other Disclosure Documents to be Completed by Seller Unless Exempt 10 Definition of What is a Fully Completed TDS 10 Definition of What is a Fully Completed Lead Disclosure &/or Seller s Supplemental Checklist 10 Effect of Delivery of Disclosure Documents After Offer Is Made 10 Buyer Obligation to Sign & Deliver Disclosures 10 CAUTION Seller Disclosure Obligations Sets out Time Frame for delivery to Buyer or Buyer can acknowledge receipt of specific forms listed with individual check boxes All Questions in II Answered & Signed; III & IV Responses & Signed All Questions Answered and signed by Seller Statutory right to cancel is explained Time Frame established & Seller Cancellation Right if Buyer fails to deliver signed documents Seller must disclose known material facts even if exempt from filling out TDS 11 Property Disclosures NHDS & Other Seller Disclosures - FIRPTA 12 Government-Mandated Reports, Retrofit Requirements and Compliance Statements Smoke Detector, Carbon Monoxide & Code Complying Water Heater Bracing Seller expense 13 Buyer Duty of Care Statutory duty of Buyer to exercise reasonable care 14 Property Condition Buyer s right to inspect scope defined 14A Inspection Contingency Scope of Buyer s Right of Investigation 14B Consequences of Failing Buyer assumes risk if to Inspect Buyer does not inspect 6A & 6B All Statutorily Required Disclosures are Listed that Seller Must Provide Unless Exempt 6A-3 When Seller Must Amend TDS -- New Information that is not in any Reports Received by Buyer. 6A-4 Statutory rescission right explained 6A-2 Buyer Obligation to Sign & Deliver Disclosures 9A 9B 9C 4B 9B & 10A 10A Seller Duty to Disclose NHDS Withholding Allocation of costs of these issues is negotiable Buyer s Investigation Scope of Buyer s Right Time Frame for delivery in CAR 14A ; no means to document prior receipt of these documents in CAR contract. CAR references all statutes but not all forms CAR has no definition of what constitutes a fully completed TDS not in Civil Code 1102 either. CAR has no definition of what constitutes a fully completed Lead Disclosure or Supplemental Questionnaire Neither PRDS nor statute has such a requirement. CAR uses rescission per TDS; PRDS uses cancellation per statute. PRDS includes Time Frame in this ; default 5 days. CAR s Time Frame in 14B-1-ii, default 17 days Stronger cautionary language in PRDS; CAR does not reference permits or additions. CAR lists separately & Time Frames are in 14A. FIRPTA must be completed during first 7 days with CAR and during last 5 days of escrow with PRDS form. CAR makes these items negotiable; PRDS puts onus on Seller unless there is another agreement. CAR does not expressly state this statutory duty CAR s explanation is in 2 places vs. 1 in PRDS PRDS references SMSC; CAR references BIA CAR does not expressly state consequences

4 14C -D Scope of Structural Pest Investigation When No Agreement Regarding Allocation of Costs 14E Seller/Buyer Obligations Seller to make Property reasonably available for inspections w/utilities on; Buyer cannot do destructive testing, make repairs without Seller s 14E Buyer Indemnification for Damages caused by Inspections. 15 Lead-Based Paint Inspection Contingency 10B 10C Not separately labeled written approval. Buyer indemnification 10D Buyer Indemnity and Seller Protection Federal requirement in pre-1978 housing; See 8D. 16 Seller s Documents Timing of Delivery of Required Documents 17 Tile Insurance & Preliminary Title Report Options to identify who pays Escrow & Title; Identify Escrow Holder & how Title is to be taken by Buyer. Separate title contingency see 8E 17 NOTE Legal Status of Preliminary Report 18 Optional As Is Check box - Required to make this an As Is Contract definition 10A-i Lead is listed as part of Buyer s investigation 14A 12 4C Timing of Delivery Title and Vesting Defined Allocation of Costs 12A Not Labeled but Same Concepts 9 Condition of Property CAR does not include this concept Same Concepts Same Concepts CAR has no separate Contingency regarding Lead Based Paint. Default is 5 days for PRDS; Default is 7 days for CAR PRDS has all title concepts in 1 and allows for a separate title contingency; CAR has concepts in 2 different places and title is part of property inspection contingency. CAR default is that contract is As Is. Both define As Is as present condition 18A Continuing Seller Obligation Even if As Is Seller must still disclose known material facts and comply with point of sale requirements Buyer Retains All 18B Buyer Retains Right to Inspect Contingencies 18C Deletion of Pest Control Seller Not Obligated to & Seller Repair Perform Pest Work Or Obligation Make Repairs 18D No Exceptions Unless Checked, no exceptions to As Is 19 Structural Pest Control Buyer has ability to Inspection ( SPC ) exclude SPC even if not & Certification As Is sale 19A Operative Report 3 Options for which SPC Report controls Operative Report ; default is existing report 9A 9B Seller Must Disclose Buyer Has Right to Inspect 4A-1 CAR allocates who pays for report PRDS is stronger and clearer as to what Seller must do even if this is an As Is sale. PRDS is clearer as to Buyer retaining contingency rights CAR Has No Automatic Removal of any s in an As Is Sale. CAR Has No Exceptions to an As Is Sale. CAR Has no SPC ; Must use separate WPA Addendum see 11B WPA does not have a mechanism to designate which report controls when different reports exist

5 19B Seller Pays For Section 1 Controlled by Operative Report 19C Inaccessible Areas Buyer Rights and Obligations 19D Who Pays For Dependent Upon Supplement Report Findings of Additional Section 1 Work 19E Fumigation Controlled by Operative Report; clear warnings re fumigation problems 20 Seller Obligations to Repair/Correct 21 Contingency Removal & Cancellation Rights 21 Contingency Removal Cautionary Note 21A 21B 21C Notice to Perform ( NBP ) Both Contracts Now Allow a NBP for all Contingencies & Contractual Obligations Request for Repairs or Other Action Buyer s Cancellation Right If Not As Is ; Defined as deficiencies known by Seller or found before COE Active Contingency Removal Method defined and new term defined: Time Frames 14 Time Periods; Removal of Contingencies; Cancellation Rts. CAR WPA CAR WPA CAR WPA defaults to whoever paid for the report. CAR WPA does not deal with fumigation at all. Not Included In CAR Contract CAR Has all Time Frames in A & B rather than with the subjects of those Time Frames Removal Defined 14D Effect of Removal CAR has a more detailed explanation but the effect of removing a contingency is the same in both contracts. 2 Day Written Notice can be delivered at any time earlier than Time Frame date but cannot shorten any Time Frame Second day of NBP must be a Business Day Timing of Seller Repairs & Other Action; Cancellation right defined; Explicitly states Good Faith is needed 14C-3 22E Notice to Buyer to Perform - 2 or optional time frame for Notice Period 14B-2 Method of Requesting Repairs & Timing. 14B-3 Right Defined The timing for the CAR NBP can be of any length but limits how much earlier the NBP can be delivered; PRDS is the opposite Last day of NBP must be a Business Day Essentially the same. Good Faith is not stated in CAR Contract but may still be implied by law. Seller s unreasonable refusal to release deposit - CC D Seller s Cancellation Rights 22 Repairs How repairs are to be completed 23 Seller s Obligation to Maintain Property During Escrow Condition of home when delivered to Buyer 14F Effect of Cancellation on Deposits Good Faith determination 14C Good Faith Determination 15 Method & Seller Required Docs Property to remain in same condition and Seller to remove debris & Personal Property Broom Clean 9 Condition of Property To Be Maintained By Seller CAR details the statutory penalties; PRDS does not CAR has more Seller paperwork requirements but does not require use of Licensed Contractor PRDS Has Separate With Greater Explanation & Note for Insurance

6 24 Walk-Through Inspection Defined purpose Not a contingency 25 Home Protection Plan Options for who orders & pays for plan; optional coverage 26A Escrow Instructions Contract constitutes Joint Escrow Instruction ; 26B 26C Property Tax, Other Prorations Public Improvement Bonds, Assessments, Property Taxes Release of funds if no COE mutually signed Property Taxes are to be paid current through Escrow Paid current through Escrow 27A Entire Agreement Final expression of all agreements 27A Addenda Cannot change except by written agreement signed & delivered by Parties 27A Signatures Effect of , fax or electronic signatures 27B Forms PRDS forms can be substituted by other forms 27C Parties Identifies Parties As Buyers & Sellers 27D 27E Acceptance and Delivery Limitations on means of Delivery Binding Agreement; Assignment Brokers are not Parties Defines Acceptance, Delivery & modes of delivery authorized Allows Buyer to limit means of Delivery Contract is binding on heirs; No Assignment Without Seller s Prior Written Approval 27F Attorneys Fees Prevailing Party is awarded Reasonable Fees & Costs 27G Dissemination of Information If Property is listed on MLS, Notes Specific Information to be Disclosed to MLS 16 Final Verification Terminology is different but concept is the same 4D-6 Allocation of CAR does not specify who Other Costs orders the policy 24A 14F 17 4D Joint Escrow Instructions Mutually signed Release document Prorations of Property Taxes And Other Items 17 Prorations of Property Taxes And Other Items 28 Entire Contract 28 Changes CAR limits which are deemed escrow instructions Both require mutual agreement to release funds calculation of prorations. HOWEVER, only CAR allows Parties to negotiate who pays for county, city and other transfer taxes. 22L Signed defined but CAR does not reference need to cooperate with third parties to secure ink signatures 22B CAR Forms Other forms can be used 24C A 22A 22H Escrow Instructions Brokers Acceptance Defined Delivery Defined Both Contracts allow for Parties to agree to use comparable other forms CAR Excludes Brokers as Parties To the Contract In 2 Separate s Organized differently. CAR specifies personally received CAR has no mechanism to limit means of Delivery CAR does not reference heirs; CAR does not limit ability to assign 21 Attorney Fees CAR notes exception for failure to first mediate in 26A. PRDS does not cross-reference 19 Multiple Listing Services CAR does not recognize any exceptions to reporting to MLS

7 27H Legal & Other Professional Advice Real Estate Licensees can only provide real estate advice 27I Governing Law California Law controls interpretation; County where Property is located controls Venue 27J Risk of Loss Material Damage to Property prior to COE; Assignment of Insurance Proceeds 27K Time Time us of the Essence; Definition of Days & Business Days 27L Equal Housing Property sold in Opportunity compliance with Fair Housing Laws 27M Megan s Law Sex Offender Database Disclosure 27N Notice re Gas Pipe Line Disclosure Regarding Website 27O Capacity of Parties Allows Individuals Who Are Acting on Behalf of Others to Simply Sign Their Name CAR does not include ; just uses Disclaimer at bottom of CAR form 28 Entire Contract CAR has comparable interpretation provision but does not include any Venue Agreement CAR does not include a Risk of Loss provision; CAR relies on Civil Code Section Time Of Essence CAR has separate for Time is of the Essence 22E Definition of Days 20 Equal Housing Opportunity 6D 6E Megan s Law Database Disclosure Notice re Gas Pipe Line Definitions are comparable Same Required Disclosure under Civil Code Section a Same Required Disclosure under Civil Code Section CAR does not include a Provision Authority to Act Sets Forth Timeframes for Individuals to Provide Proof of Authority to Act 28A Liquidated Damages If Initialed Sets Cap on Damages Seller Recovers if Buyer defaults 28B Buyer s Default Buyer s default defined; Consequences of Buyer failing to Close 28C Seller s Default Default defined; Consequences of Seller failing to Close 28D Other Non- Performance Consequences of not performing any aspect of this Contract 25 Liquidated Damages 27 Terms and Conditions of Offer 29 Dispute Resolution 26 Dispute Resolution 29A Mediation Buyer and Seller 26A Mediation automatically agree to mediate disputes CAR does not include a Provision CAR does not attempt to define a Buyer s default comparable language comparable language 29A Effect of failure to first Mediate Failure to first mediate impacts Attorney s Fees 26A Mediation

8 29B Arbitration of Disputes If initialed, Buyer and Seller agree to Arbitrate disputes; includes Statutory Notice 29C Exceptions Procedures that are Not Subject to Mediation 29D Participation of Real Estate Licensees and/or Arbitration Real Estate Licensees are not obligated to mediate or arbitrate 30 Offer Offer expiration date & time; 26B Arbitration 26C-1 Exclusions Essentially same exceptions but ordered differently 26C-2 Brokers PRDS references need for a potential claim against the real estate professionals 29 Expiration of Offer CAR includes default time frames but PRDS does not Signing in Counterpart Authorized 27 Terms and Conditions Authorization for Signing in Counterpart 31 Designation of Buyer s Capacity Providing Selling Agent Contact information does not establish means of perfecting Delivery Checkboxes to Indicate if Buyer is a Trust, has a Power of Attorney or is an Estate 32 Brokerage Fee Selling Agent commission either offer in MLS or Separate Agreement; D & 23 Real Estate Brokers Selling Agent Compensation comparable language comparable language but has 3 separate Addenda to Achieve the Same Purpose concepts but CAR has these issues spread over 3 Paragraphs 33 Acceptance Subject to Counter Offer Brokers Commission Irrevocably Assigned IF Initialed By Seller and IF Seller Signs 31 the Seller s Acceptance is subject to a Counter 34 Acceptance Seller agrees to Sell 24C Irrevocable Assignment 30 If Seller s Acceptance Subject To Counter 30 Acceptance of Offer CAR does not specifically require the Seller to sign in the signature lines below the reference to a Counteroffer 35 Designation of Seller s Capacity Paragraphs requiring initials are incorporated IF initialed by all Parties; or by other written agreement. Counter offer required if initials are not consistent. Checkboxes to Indicate if Seller is a Trust, has a Power of Attorney or is an Estate 36 Non-Acceptance If Seller Initials Seller confirms Offer was presented & rejected 27 Inconsistent Initials on s Counter Required Presentation Rejection comparable language but has 3 separate Addenda to Achieve the Same Purpose CAR Has 2 Boxed Sections for Seller to initial to do what PRDS does in 1

9 . Confirmation of Acceptance by Buyer Space is provided by CAR even though legally not required. Not in PRDS form