December 22, 2020
Two Forms Updated
SFAR’s Standard Forms Committee has updated two existing forms for this December. The SFAR Purchase Agreement has been refined in six places:
Paragraph 9: Has been made more specific with regard to home access, automation, monitoring and security systems. All such systems are now defined to be included in the sale. Listing agents should be aware that if their Seller clients intend to remove a system that would otherwise be considered included, they need to Counter them out of the contract.
Paragraph 14: Has been amended to make it clear that estoppel certificates need only be delivered to current tenants (which might have been obvious to most of you) and that some of the documents specified in the Rental Property contingency removal may not be applicable to the particular transaction.
Paragraph 22: The last sentence has been bolded to emphasize that when buying rent- controlled property, the Buyer should consult with a San Francisco landlord-tenant attorney.
Paragraph 28: This paragraph has been changed to make it clear that the Buyer selects the terms of any home warranty program being provided to them, up to the financial limit stated, with excess coverage to be paid by the Buyer.
Paragraph 41: This paragraph has had text added to it to emphasize that the Buyer should not remove contingencies without receiving all required disclosures and other documents, and that, if they do so, they are relinquishing any contractual rights that apply.
Paragraph 46: CinFEN compliance. Beginning in November 2020, a revised Geographic Targeting Order (GTO) made it clear that it did not apply just to all cash purchases, but to any purchase with at least $300,000 in cash, so the applicability note in the paragraph has been changed to “Qualifying Purchases”.
The second forms change is an update to the Transfer Tax Calculation form (TFRTAX-SF), to reflect the doubling of the local transfer tax rate for sales above $10 million which was approved by the voters in Proposition I in November.
For agents who use the California Association of REALTORS® RPA form, note that its scheduled major revision every 5 years has been deferred to December 2021 due to COVID- 19. A task force has been diligently working on the next revision, however, and training on the new form will begin in the Spring of 2021. At the present time, the form appears to be expanding to 15 pages from its present 10 pages, with the highlights of the deal presented in an easy-to-read summary chart on the first page.