Question 1 has been revised to indicate that the California Department of Health Services (CDHS) has been reorganized with the California Department of Public Health (CDPH) taking over responsibilities for environmental disease control and the Indoor Air Quality Program. The previous decision by the CDHS to NOT establish “permissible exposure limits” (PELs) for mold was reaffirmed by the CDPH in 2008. The CDPH has not, as of yet, adopted any permissible mold exposure limits.
Question 2 was added to explain the two reasons why the CDPH has not established PELs. Namely, one, a lack of funding and two, disagreement by scientists over what those limits would be.
Question 5 and 6 were added to indicate that the Seller Property Questionnaire (C.A.R. Form SPQ) asks the seller under question E.2. whether they are aware of any problem with or infestation of mold, mildew, fungus or spores, past or present, on or affecting the property. The question notes that the SPQ is required by contract in all C.A.R residential purchase agreements where there is no TDS-exemption.
Question 12 was added to indicate that the Statewide Buyer and Seller Advisory (C.A.R. Form SBSA) may reduce potential liability for problems relating to mold.
Questions 17 through 26 were added to discuss the recently passed Senate Bill 655 as it impacts residential landlords. SB 655 essentially identifies mold explicitly as a cause that may render a property uninhabitable or substandard. Previously, mold as a cause for such was recognized in the law only implicitly.
Question 38 was revised to recommend use of the AVID form in disclosing the results of an agent’s visual inspection. The question offers tips and advice on how an agent might avoid speculation on the AVID form as to the existence of mold on the property.
Question 3 has been revised to state that the fee is now $152.33 per habitable structure but almost all structures will be billed at $117.33.
Question 7 has been revised to include the State Board of Equalization billing schedule for each county.
Question 10 has been added to clarify that AB 301 did not affect the owner’s responsibility to pay the fire fee. Even if the property is sold, there is no automatic proration of the fee between buyer and seller.
Question 3 has been revised to state that the SPQ is now a required disclosure per the C.A.R. residential purchase agreements when a TDS is also required.
Question 4 has been added to state that the SPQ is not required when the transaction is TDS-exempt.
Question 5 and 6 have been added to state that the ESD is a now a required disclosure per the C.A.R. residential purchase agreements when the transaction is TDS-exempt, and that the ESD, which stands for “Exempt Seller Disclosure,” has replaced the SSD.
Question 10 has been added to state that the SPQ must be delivered within seven days, by default, after acceptance.
Question 18 has been added to state that the SPQ requires the seller to turn over copies of reports, inspections, disclosures, warranties, maintenance recommendations, estimates, studies, surveys “or other documents” pertaining to the condition of the property if the seller is in possession of such.
Question 7 adds a discussion of the recent Supreme Court case Reed v. Town of Gilbert affecting directional signs and concludes that this Supreme Court case will likely have little impact on commercial signage such as real estate signs.
Question 16 explains that HOA’s may ban “for sale” signs in the common areas if reasonable.
Question 18 adds that commencing July 1, 2016, the management of a mobilehome park may require the use of a “step-in L-frame” sign. If not, then signs posted in front of a mobilehome may be an H-frame, A-frame, L-frame or generally accepted yard-arm type design.
Due to the repeal of the Energy Use Disclosure requirements, the Energy Use Disclosure for Nonresidential Buildings Q&A has been amended as follows:
An introductory alert in red states that the Energy Use Disclosure has been repealed effective January 1, 2016 and that information in the Q&A is applicable only to transactions entered into before January 1, 2016.
The Truth-In Lending Act Variable Rate Disclosure section (section XVI.B.ii) has been updated to reflect changes that require disclosures in three scenarios: (a) disclosure at the time of loan application; (b) disclosure to be made during the initial rate adjustment; and (c) disclosure to be made during the year that the interest rate adjustment is implemented.
Added a new section (section XVIII) to reflect the new TILA/RESPA Integrated Disclosure(s).
Changed TILA and RESPA citations to reflect a change in the federal codes.
The Good Faith Estimate and HUD-1 Statements Q&A has been revised to indicate that beginning October 3, 2015 the TILA-RESPA Integrated Disclosures (TRID) will supersede the Good Faith Estimate (GFE) and HUD-1 Statement forms for most closed-end, consumer credit transactions secured by real property. In place of the GFE and HUD-1, there will be two new forms called “the Loan Estimate” and “the Closing Disclosure” which will combine disclosures under both RESPA and TILA.
Question 35 has been revised to state that in advertising team names at least one member of the team must display in a conspicuous manner his or her name and license number. Additionally, the broker identity must include the broker’s license number.
Question 36 has been revised to state that a team name, used as specified, does not constitute a DBA under any law and is no longer required to be registered as such at the county recorder.
Question 37 was added to indicate that the BRE’s previous policy of approving team names after registration with the county and submission to them for approval (despite having the name of a sales agent within the name) will no longer be implemented. Team names, used as specified, no longer need to be registered with the county nor approved by the BRE.
Question 41 was revised to state that in advertising a salesperson-owned DBA, the responsible broker’s identity must include the broker’s license number.
Question 42 was added to indicate that the “responsible broker identity” means the name under which the responsible broker operates or conducts business in general or is a substantial division of the real estate firm. It includes the broker’s license number. But it will never be a team name or a salesperson-owned DBA.
Question 39 has been amended to provide additional advice to agents in light of the new form rules:
The listing agent should be realistic in advice given to the seller regarding the potential for closing delays.
In light of the potential for delays in the closing, attorneys who work closely with N.A.R have recommended as conservative advice to build into your escrows an extra 15 days for closings. If for example, you had expected a 30 day closing, now plan as a precautionary measure for a 45 day escrow.
Agents should be aware that the buyer may have to indicate their intent to proceed to the lender in writing, depending upon the lender’s requirements.
The intent to proceed should be provided to the lender within ten business days.
The buyer may be asked by the lender to pay for an appraisal or other loan processing fees immediately after confirming their intent to proceed. Previously, lenders may have collected payment information in advance. This is not permitted under TRID. So lenders may now require payment information at the same time the buyer confirms their intent to proceed.
Agents, at least initially, should avoid back to back closings.
Communications between the buyer, the escrow/title company, the buyer’s agent and the lender should be kept tight. Any changes in the transaction should be communicated promptly to all parties.
Questions 58 through 60 have been added to explain that the new rules allow for the buyer’s and seller’s transaction information to appear on separate Closing Disclosures. Specific direction to a title or escrow company is provided as to how this may be accomplished.
Question 64 has been amended to link to the CFPB’s new publication, “The real estate professional guide.”
Question 12 has been added to explain what a qualified substitute is.
Question 13 has been amended to explain that an escrow may use form QS (Qualified Substitute) as a declaration informing the buyer that the escrow has received and retains a completed seller’s affidavit (C.A.R. Form AS).
Question 14 and 15 have been added to emphasize that the seller does not fill out the QS form. That is the job of the escrow (or title company).
Question 16 has been added to explain that the escrow (or title company) should prepare and deliver the QS form to the buyer within a reasonable time after receipt of the seller's affidavit.
Question 17 and 18 have been added to emphasize that the seller must nevertheless fill out the AS form completely including the Tax ID number when providing it to the escrow.
Question 19 has been added providing a graphic that describes the delivery of the seller’s affidavit (C.A.R. Form AS) from the seller to the escrow and then delivery of the QS form from the escrow to the buyer.
Question 20 has been added to highlight that the RPA-CA states that the escrow will act as a qualified substitute.
Question 21 has been added to indicate that the seller is still obliged to provide the buyer with an AS form where the escrow refuses to act as a qualified substitute.
Question 22 has been added to explain the limited liability of the escrow under the qualified substitute rules.
The Q&A is revised to reflect the Consumer Financial Protection Bureau’s announcement proposing to delay the effective date of the TILA/RESPA Integrated Disclosure rule until October 1, 2015. While the announcement to delay implementation is only a proposal, it is expected to be adopted as a final rule.
The Q&A updates and makes changes as necessary to all references in the Q&A to the pre-11/2014 version of the C.A.R. Residential Purchase Agreement to conform to the most recent C.A.R. Residential Purchase Agreement.
Question five was added to now indicate that the following CAR forms may be signed electronically: 48-Hour Notice of Inspection Prior to Termination of Tenancy (FEHN); Pre-Move Out Inspection Statement (PMOI); Move In/Move Out Inspection (MIMO); Interim Occupancy Agreement - Buyer in Possession Prior to Close of Escrow (IOA); Notice of Right to Inspection Prior to Termination of Tenancy (NRI); Residential Lease After Sale-Seller in Possession After Close of Escrow (RLAS); Residential Lease or Month-to-Month Rental Agreement (LR);
Question six was added indicating that two letters from ZipForm’s Sample Letter Library regarding a tenant’s abandoned personal property should not be signed using an electronic signature.