California Real Estate Purchase Contract

In California, when two people have an intention to purchase a residential or commercial estate, they need to have completed specific forms. One of these papers is the California real estate purchase agreement.

The California real estate purchase agreement is a legal paper confirming the transfer of estate from a vendor to a purchaser. By signing a printable real estate sales contract, a vendor confirms they transfer their ownership of the real estate to a purchaser, and since that moment, the purchaser receives all the rights on this estate.

A vendor needs to register terms regulating the real estate transfer process in the purchase agreement. These terms can be any emergencies that might have occurred before the deadline of the deal (for example, if the purchaser gets funding from some local financial structure) and selling prices of the real estate. It is also advisable but not mandatory for the vendor to state that the purchaser needs to make a deposit (1% to 3% of the selling price). If the purchaser cancels the deal, the vendor does not return this money.

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California Residential Purchase and Sale Agreement

When individuals or entities want to purchase real estate, they must sign the California residential purchase and sale agreement to transfer real estate within the law. Both parties of a real estate transfer process (the vendor and the purchaser) need to create terms meeting the interests and demands of both of them.

It is up to the vendor to register the selling price and the deadline of the deal in the residential purchase and sale agreement. The purchaser needs to know these details  before the signing date.

The vendor also needs to include all the emergencies that might occur before the deadline of the real estate transfer deal, the amount of the deposit money, conditions of a real estate, and control examination of this estate. According to California state laws, it is the vendor’s direct duty to ensure that the purchaser receives all the notifications related to the real estate.

The main legal documents covering all the data related to a residential property transaction process in California are a California Constitution (CONS), California Health and Safety Code, California Civil Code, California Business and Professions Code.

California Commercial Purchase and Sale Agreement

If anyone intends to purchase or sell commercial real estate, they need to sign the California commercial purchase and sale agreement. This agreement must contain essential information such as the selling price of the real estate, rental options, funding, post- and pre-closing contract terms, consents, and approvals.

Once parties discuss and agree on the terms of the commercial purchase and sale agreement, once all the negotiations between the vendor, the purchaser, and their agents over brokerage agreements are done, they can sign a completed agreement. The purchaser should transfer a letter of intent to the vendor to complete the real estate transfer process.

Few legal documents cover a commercial real estate transfer process in California:

  • California Civil Code
  • California Constitution (CONS)
  • California Business and Professions Code
  • California Health and Safety Code

Required Seller Disclosures in California

There are certain seller disclosures according to California law.

Real Estate Tax Disclosure (CC § 1102.6c)

According to the California property tax law, an assessor has to revalue real estate when a new owner of this estate receives their rights on the estate. If parties to the real estate transfer process do everything correctly, they receive one or two tax bills (their number depends on when credit closes).

Wood Destroying Pests and Organisms Inspection Report (BPC § 8516)

A specific inspection checking the absence of pests and organisms must be completed before the parties sign an agreement. Every inspected property must be imposed a filing fee. Once a property is inspected, its address must be registered on a specific form within ten business days after the inspection and delivered to the purchaser afterward. If there is no proof that the property has been inspected, the owner has to pay a fine.

Megan’s law

This law was accepted in 1996 and allows people to get all the data on registered sex offenders in their nearby areas. According to Megan’s law, everyone has the opportunity to know about the facts of sexual offenses in the area they live. The name of the law relates to Megan Kanka, who was only seven years old when she was raped and killed by her neighbor. The neighbor turned out to be a registered child molester, but Megan’s parents did not know about that. Now, every purchaser in California has access to a database of all registered sex offenders in the state of California.

Environmental Hazards Pamphlet (CC § 2079.9)

Every person purchasing property in California has the right to know about well-known environmental threats that can affect real estate in any way. The purchaser must have a copy of this pamphlet.

Natural Hazard Disclosure Statement (CC § 1103.1)

It is the direct duty of the vendor to notify the purchaser whether real estate is close to any natural area of increased danger.

Water Heater and Smoke Detector Compliance (HSC § 13113.8)

The purchaser should have such compliance to ensure that both the water heater and smoke detector established in their property satisfy the California State law.

Transfer Disclosure Statement (TDS) (CC § 1102)

A vendor of a property needs to complete this statement and deliver it to the purchaser afterward.

Water-Conserving Fixtures and Detector Notice (CC § 1101.4)

It is up to the vendor to notify a potential property owner whether they need to replace the existing water-conserving fixtures and give them details about the condition of carbon monoxide detectors.

Homeowner’s Guide to Earthquake Safety (CC § 2079.8, CC § 2079.9)

Purchasers must have this guide on their hands in case of an emergency in the form of an earthquake.

Local Option Real Estate Transfer Disclosure Statement (CC § 1102.6a)

Check the local jurisdiction of your state to know if you need to have this statement or not.

According to California Constitution (CC § 1102.3), if a purchaser does not receive any of the disclosures mentioned above, they have three days to terminate the contract (or up to five days after the mailing date). For this, they need to transfer a notice either to the vendor or the vendor’s agent.

Published: Jun 15, 2021