What Does that Term Mean?

The C.A.R. Form California Resident Purchase Agreement and Joint Escrow Instructions (RPA) commonly used by real estate agents contains several specially defined terms with important significance to the contract and transaction.  The specially defined terms can be found in paragraph 30 of the RPA revised 12/15 form and near the end of most of the other C.A.R. form contracts.

A specially defined term is a term that has a specific definition provided within the document or contract.  For instance, in Paragraph 30.E. of the RPA, the specially defined term “‘Copy’ means copy by any means including photocopy, NCR, facsimile and electronic.”  Specially defined terms are either written with initial capital letters (e.g. “Electronic Copy”) or all capital letters (e.g. “ELECTRONIC COPY”).  The RPA uses initial capital letters for specially defined terms.

When a special definition is provided for a specially defined term, the special definition will apply throughout the contract unless explicitly stated otherwise.  Thus, it is imperative to write the specially defined term with either initial capital letters or all capital letters to signify that it is a specially defined term with a special definition.  However, real estate agents preparing their own clauses, forms, and contract language will commonly make the mistake of either utilizing a general term when a specially defined term is already specially defined by the RPA or not using initial capitalization of the specially defined term in the RPA to signify that the term is specially defined and that the special definition should be applied to the term.

Here are a few particular examples from the special definitions in Paragraph 40 of the RPA that can be problematic if the specially defined term is not initially capitalized to signify it as a specially defined term:

·       “'Acceptance’ means the time the offer or final counter offer is accepted in writing by a Party and is delivered to and personally received by the other Party or that Party's authorized agent in accordance with the terms of this offer or a final counter offer.”  Paragraph 30.A.  Sometimes, agents will incorrectly deem the date of acceptance in writing as the date of Acceptance.  However, the specially defined term for “Acceptance” also includes the personal receipt by the other Party or authorized agent.  The general usage of the term, “acceptance”, could include only the date of acceptance, not the personal receipt of the acceptance by the other party.

·       “‘Close Of Escrow’, including ‘COE’, means the date the grant deed, or other evidence of transfer of title, is recorded.”  Paragraph 30.D.  Sometimes, agents will incorrectly deem the “Close Of Escrow” date as the date that the escrow officer says the escrow is closed or the date of the estimated close of escrow.  However, under the special definition provided in the RPA, the only relevant factor for determining the “Close Of Escrow” is the recording of the grant deed or other evidence of transfer of title.

·       “‘Days’ means calendar days. However, after Acceptance, the last Day for performance of any act required by this Agreement (including Close Of Escrow) shall not include any Saturday, Sunday, or legal holiday and shall instead be the next Day.”  Paragraph 30.F.  Perhaps the most important aspect of this special definition is the extension of time “for performance of any act.”  Thus, any deadline to complete inspections, approve disclosures, remove contingencies, or close escrow is extended to the next non-weekend, non-holiday day.  Sometimes, agents will incorrectly write the term, “days”, which would arguably be only calendar days and not include the extension provided in the special definition of the RPA.

These are just some particular examples of the special definitions provided in the RPA and repercussions of not using the properly initial capitalized, specially defined term.  If a special definition is provided in the RPA, agents should use the specially defined term with initial capitalization.

Esquire Real Estate provides the services of both a real estate attorney and real estate broker and is able to draft and advise you regarding additional specially defined terms that might be useful to your particular transaction.  Please feel free to contact us with any questions or for a free consultation.

In Escrow, Mission Viejo

Esquire Real Estate is pleased to announce that we have entered escrow on this lovely Mission Viejo home. If you have any further questions about this or another property, please contact us and we can assist you. Here is a link to the original blog.

For Sale, Presented by Esquire Real Estate

We are pleased to present this impeccably updated 3 bedroom, 2 full bathroom, 1,369 sq. ft. home with 10,472 sq. ft. lot in the desirable city of Mission Viejo with Lake Mission Viejo privileges and all of its amenities. Enjoy the bright, open floor plan with multiple skylights and highly upgraded kitchen, living room, master bathroom, backyard, and spa. Enter through the custom door to the open living/family room, kitchen, and dining room with ceiling fan, pendant lighting in the kitchen and over the kitchen island, beautifully framed fireplace, wood flooring throughout the living/family room and hallways, granite kitchen countertops, central A/C and heating, and so much more. Then, step into the spectacular entertainer's backyard with new grass, built-in rock spa with child safety net, waterfall, and rock decor, built-in BBQ, outdoor refrigerator, beautiful mature landscape and hardscape, mature orange tree and lemon tree, and dog run or RV parking. With the small town feel of Mission Viejo and excellent schools, you have a house to call home.

For more information, please click here to see the MLS listing. Please contact us if you have any questions about this home or about listing your real property for sale

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Homeowners: New Law on Turf

Due to California’s ongoing drought and in an effort to address the effects of the drought, the California Legislature has passed a series of laws affecting property and homeowners.  One such law that went into effect on September 4, 2015 makes void and unenforceable any homeowner association rules or regulations that prohibit artificial turf.  Specifically, Civil Code section 4735 makes void and unenforceable any common interest development or homeowner association’s governing documents (CC&R’s) or architectural or landscaping guidelines or policies that prohibit the use of artificial turf or any other synthetic surface that resembles grass.

You can view the law and the legislative notes here: http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140AB2100.

The Legislature passed this law as “an urgency statute” necessary “to conserve water during California’s historic drought” and to encourage homeowners “who conserve water by watering their lawns less often.”  However, homeowners should be warned that although this code section currently makes void and unenforceable rules or regulations that prohibit artificial turf or synthetic surfaces, the Legislature could repeal this law when California likely exits the drought.  If the Legislature does repeal this law in the future, the CC&R’s or other governing documents would then spring back into effect and could prohibit artificial turf or other synthetic surfaces at homes and properties under the jurisdiction of the homeowners association.