17 Day Contingency Period in Standard Purchase Contract

By
Real Estate Agent with Remax Estate Properties - BRE #01368971 DRE #01368971

The California Residential Purchase Agreement (California Association of Realtors form RPA-CA) is a standard form purchase contract (Click Here to view a pdf file of a sample RPA-CA purchase contract) and receipt of deposit utilized by Realtors throughout the state of California.

 Due Diligence Contingency Period: There is a standard 17 day contingency period for the buyer to read and approve the disclosures given above by the seller. and complete any investigations or inspections of the property which the buyer wants. During this contingency period, the buyer may request that the seller make certain repairs disclosed in the inspection reports, however the seller is under no obligation to do so. The buyer may cancel the purchase any time during this contingency period. If the buyer has not removed all contingencies by the end of the 17 day contingency period, the contingency period is effectively continued until the seller sends to the buyer a Notice to Perform, which requires the buyer to remove all contingencies within the agreed upon period of time in the contract (usually from 24 to 72 hours), or the contract will be canceled.

Once the buyer removes all contingencies, failure by either the buyer or seller to close escrow on time may be a breach of the contract. If the buyer breaches the contract, the seller may require forfeiture of the buyer's deposit, as liquidated damages. The RPA-CA is designed to let the buyer, seller and agents know where they stand contractually at any given time because significant decisions must be in writing. Since most contingencies expire at the same time (17 days), a buyer who is satisfied with the property or who has agreed with the seller on repairs can remove the contingencies with only one document. The requirement of written contingency removal avoids surprises associated with inadvertent contingency removal and implied waiver of time periods.

For more information about the California Residential Purchase Contract  visit my website at http://www.maureenmegowan.com

Image courtesy of conveyancing-help.com

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