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New forms from state Realtor group aim to avoid disputes with buyers

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Some local real estate professionals characterize new forms for agents recently released by the California Association of Realtors as "cover your (bleep)."

They may benefit other areas, but for the most part, C.A.R. forms mirror those already in use for a couple of years by San Diego County's residential real estate community, according to Michael Spilger, an attorney with CBN Real Estate Executives and member of San Diego Association of Realtors' Risk Management Committee.

"We're often at the forefront or the cutting edge whenever C.A.R. does forms -- they copy our forms to some extent, or address issues we're already addressing," he said.

Most forms are created in response to court decisions that come down, Spilger added.

Perhaps the most beneficial for agents -- and clients -- is the "buyer material issues" form. Buyers must specify to owners their concerns: they want their children enrolled in a certain school district, they want a western-facing home, or they want to add a unit. Buyers use the form to document their issues. The form was created to help avoid disputes with the broker further down the road about whether a conversation took place and what was discussed. The form enables brokers to better assist buyers when gathering information and to provide better sources of information.

"Buyer's agents are supposed to be omniscient and know anything and everything that might be important to your buyer and investigate those matters or refer them to the proper professional," he said. "My experience as an attorney is when something goes wrong with the property after the fact, the buyer will state, 'This is something that's important to me and why wasn't I informed?'"

The form is redundant to some extent, because a similar -- and, according to Spilger, better -- form is already in use here. The "buyer's election of inspections," created locally, addresses more than 20 inspections a buyer might want to consider. The agent goes over what buyers should consider.

San Diego Association of Realtors' Risk Management Committee, comprising attorneys and nonmember brokers, created the local forms. The committee was formed to address a slew of varying broker's forms. It was the battle of the brokers. The committee consolidated the forms to make sure they were uniform and had a good legal basis, Spilger said. The new forms -- eight of them -- and revisions, add a nominal amount of paperwork, he said.

The state doesn't require agents to use the forms, which were created to assist agents in handling transactions. The forms raise the level of professionalism to meet C.A.R.'s existing standards of care as set forth by Realtors group, by statute and by state law, Spilger said.

A typical transaction can involve between 40 to 50 forms, he said. More than 100 are available.

C.A.R. typically releases new forms in April and October, according to June Barlow, vice president and general counsel of the association. One exception is a release because of a change in the law.

In 1980, the contract comprised two pages, mostly with blank lines.

One of C.A.R.'s new forms addresses an agent's responsibility to inform buyers about current market conditions and how it can fluctuate. Another form addresses a law that goes into effect at the beginning of next year. Under the new law, a landlord can't require a tenant to pay rent in cash unless the renter has defaulted on the rent.

Among forms sent back for revision was one supplementing a disclosure form, according to David Gillingham, broker and owner of Coronado Island Realty. C.A.R. modeled its form after SDAR's, which is more comprehensive, he said. The form was sent back to the drawing board because a number of members of Northern California Realtor associations expressed concerns about "increasing the standard of care," Gillingham said. Meaning, an agent not using the form faces an increasing potential for litigation.


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