Are There Any Default Provisions In A CAR Residential Purchase Agreement?

Are There Any Default Provisions In A CAR Residential Purchase Agreement?

Real Estate Law: Are There Any Default Provisions in a CAR Residential Purchase Agreement?

The California Association of Realtors® (CAR) Residential Purchase Agreement (RPA) is a widely used standardized form that governs the terms and conditions of residential property sales in California. This comprehensive contract covers various aspects of the real estate transaction, including the purchase price, contingencies, disclosures, and other essential provisions. The CAR RPA is designed to be flexible and adaptable to different real estate transactions while providing a clear framework for both buyers and sellers. In this article, we will explore the default provisions in the CAR Residential Purchase Agreement and their significance in California real estate transactions.

Understanding Default Provisions:

In the context of legal contracts, default provisions refer to the terms and conditions that are automatically included in the agreement unless the parties specifically modify or remove them. These provisions are standard and commonly accepted, ensuring that the contract remains valid and enforceable even if certain terms are not explicitly negotiated between the parties.

CAR Residential Purchase Agreement Overview:

The CAR Residential Purchase Agreement is a comprehensive document that covers various aspects of the real estate transaction. It includes provisions related to the following key areas:

Purchase Price: The agreement specifies the purchase price and the terms of payment.

Contingencies: The buyer may include contingency clauses in the agreement, allowing them to back out of the deal under specific circumstances, such as unsatisfactory inspection results or difficulties securing financing.

Disclosures: The seller is required to provide certain disclosures to the buyer, which may include information about known defects, hazards, or legal matters related to the property.

Property Condition: The agreement addresses the condition of the property at the time of the sale, and the seller may be required to make certain repairs or disclosures based on the property inspection results.

Title and Ownership: The agreement addresses issues related to the property’s title, including the condition of title and the transfer of ownership.

Closing and Possession: The agreement specifies the closing date, at which point the buyer will take possession of the property.

Brokerage and Agent Compensation: The agreement outlines the compensation terms for the real estate agents involved in the transaction.

Default Provisions in the CAR RPA:

While the CAR Residential Purchase Agreement is intended to be a flexible and customizable document, there are certain default provisions that are included in the agreement. These provisions are considered standard in California real estate transactions, and they apply if the parties do not explicitly modify or remove them.

Some of the key default provisions in the CAR RPA include:

Dispute Resolution: The CAR RPA includes a default provision for dispute resolution, specifying that any disputes arising from the contract will be resolved through mediation, followed by arbitration if necessary. However, the parties can choose to opt-out of this default provision and pursue other methods of dispute resolution, such as litigation.

Broker Cooperation: The agreement includes a default provision stating that the listing broker and cooperating brokers are entitled to the agreed-upon commission when the transaction closes. However, specific commission arrangements can be negotiated between the seller and the listing broker.

Transfer of Title and Condition of Title: The CAR RPA includes default provisions related to the transfer of title and the condition of title, ensuring that the seller provides a marketable title to the property.

Proration of Property Taxes and Assessments: The agreement includes default provisions for prorating property taxes and assessments between the buyer and the seller based on the closing date.

Risk of Loss: The default provision addresses the risk of loss or damage to the property between the date of acceptance and the closing date.

Modification of Default Provisions:

While the CAR RPA includes default provisions, it also allows for modification to suit the specific needs and preferences of the parties involved in the transaction. Any provision in the agreement can be modified or deleted if both the buyer and the seller mutually agree to the changes.

To modify a default provision, the parties must use the appropriate addenda or contingency removal forms provided by CAR. These addenda and forms allow the parties to make changes to the contract and ensure that any modifications are in writing and duly executed.

Importance of Reviewing and Understanding Default Provisions:

For both buyers and sellers, it is crucial to carefully review and understand the default provisions in the CAR Residential Purchase Agreement before signing the contract. While default provisions are intended to be fair and reasonable, they may not always align with the specific circumstances of a particular transaction.

Buyers should pay close attention to the contingency periods, including the inspection contingency and loan contingency, to ensure they have sufficient time to conduct due diligence and secure financing. Sellers should understand their disclosure obligations and the terms related to the transfer of title and property condition.

If any default provision does not meet the parties’ needs, they should consult with their real estate agent and, if necessary, a real estate attorney to discuss possible modifications to the contract. It is essential for both buyers and sellers to feel comfortable with the terms of the agreement before proceeding with the transaction.


The California Association of Realtors® Residential Purchase Agreement (RPA) is a comprehensive and widely used contract that governs residential real estate transactions in California. While the RPA includes default provisions that are considered standard in the industry, it also allows for modifications to accommodate the specific needs and preferences of the parties involved.

Default provisions in the CAR RPA cover various aspects of the transaction, including purchase price, contingencies, disclosures, and property condition. Buyers and sellers should review and understand these provisions before signing the contract to ensure they align with their expectations and requirements.

Real estate agents play a crucial role in guiding their clients through the contract process, explaining the default provisions, and assisting in making any necessary modifications. In some cases, parties may choose to consult with a real estate attorney to ensure that their interests are protected and that any modifications to the contract are made in accordance with California real estate laws.

Ultimately, the CAR Residential Purchase Agreement provides a standardized framework for real estate transactions while offering the flexibility to accommodate the unique circumstances of each transaction.

Disclaimer: The information provided in this article is for general informational purposes only and should not be construed as legal advice. Real estate laws and regulations may vary by jurisdiction, and buyers and sellers should consult with a qualified real estate attorney for advice specific to their circumstances.

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