Revised Agency Disclosure Statement and Other Forms Released

C.A.R. is rolling out new and newly revised standard forms today. These forms have been added to our large catalog of forms provided as a member benefit to help REALTORS® conduct their real estate business.

Most notable among the forms being released is a revised Disclosure Regarding Real Estate Agency Relationships (Form AD). The revised AD form aims at ending the confusion surrounding the form by allowing a buyer’s agent to use just one form for both the seller and buyer to sign. REALTORS® may now handle the delivery of the AD form in either of two ways:

• Alternative A: Agents may continue the existing practice of generating three AD forms in a typical transaction. The first AD form is generally signed by the listing agent and seller before entering into a listing agreement. Absent dual agency, the second AD form is generally signed by a buyer’s agent and buyer before writing an offer. The third AD form is generally signed by the buyer’s agent and seller. An AD form signed by the buyer’s agent and seller does not create an agency relationship between the buyer’s agent and seller because the AD form is merely an information sheet. The actual confirmation of agency is stated separately in paragraph 27C of the C.A.R. Residential Purchase Agreement (RPA).
• Alternative B: The procedure for Alternative B is stated in the explanation box at the bottom of the newly revised AD (revised 11/09). Agents will still prepare the first and second AD forms stated in Alternative A. The buyer’s agent, however, may now deliver to the seller the second AD form signed by the buyer’s agent and buyer. The seller may sign acknowledgement of receipt of that AD form on the signature line in the explanation box. No third AD form is needed under Alternative B.

Other new and newly revised C.A.R. standard forms include the following:

• REO Advisories (Forms REO and REOL): These forms have been revised to inform the seller and buyer of the new Buyer’s Choice Act that came into effect on October 11, 2009. Under this new California law, an REO lender selling residential property up to four units cannot require a buyer to purchase escrow services or title insurance from any particular company. Forms REO and REOL also clarify that the real estate brokers involved in a transaction do not require the buyer to purchase escrow or title services from any particular provider.
• Property Management Addendum: This new form authorizes a property manager to withhold funds from the broker’s trust account to submit to the Franchise Tax Board (FTB). C.A.R. created this form in response to the FTB’s announcement that, effective January 1, 2010, it will begin enforcing an existing law requiring property managers to withhold and send to the FTB seven percent of income payments to certain out-of-state property owners. For more information, refer to FTB’s Resident and Nonresident Withholding Guidelines at http://www.ftb.ca.gov/forms/2009/09_1017.pdf (see, in particular, Question 70).

For a complete summary of these and other forms in C.A.R.’s November 2009 Forms Release, click here. Electronic versions of the November forms are currently available through WINForms(R) or zipForm(R) 6 at http://www.car.org/winforms/zipform6/. Printed versions of the forms will be available this week at http://www.realtysupplycenter.com.

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