A report released on Tuesday Consumer Federation of America (Court of Final Appeal) Discovery California Association of Realtors (CAR) Buyer Representative and Broker Indemnity Agreement “Barely Readable.”
The press release states that the CFA has sent this analysis to Ministry of Justice (Department of Justice) two weeks ago. Additionally, the CFA stated that the California real estate agent had obtained a copy of the analysis report.
CAR has since announced to its members that it will delay the publication of 21 standard forms related to changes in business practices outlined in the Business Practices. national association of realtors (NAR) National Council lawsuit settlement reached as a result of “formal investigation” by the Department of Justice.
CAR previously planned to release these standard forms on Tuesday, along with all other new and updated forms it promulgates.
This analysis of buyer representation and broker compensation agreements was completed by Tanya Monestier, a law professor at the university. University at Buffalo. Under the terms of the NAR Settlement Agreement, agents must sign a Buyer Representation Agreement before showing buyers a home. The requirement takes effect on August 17.
“It is impossible for a layperson to understand and appreciate the terms to which they agreed,” Monestiel wrote in her analysis. She added that CAR’s agreement appeared to “obscure the buyer’s obligation to pay its agent” and that ” Demonstrates how real estate agents planned to circumvent the NAR Settlement Agreement.”
Her analysis also identified problematic provisions in CAR contracts related to dispute resolution, dual agency, commissions owed and buyer cancellation.
According to the release, “reliable industry sources” told the CFA that the CAR had made changes to its format but had not yet shared this information with the CFA.
Unlike the buyer’s representation agreement issued by China Car Rental, the Court of Final Appeal found that the buyer’s broker representation agreement issued by China Car Rental Exp Properties “Simpler, clearer and more consumer-friendly than the CAR agreement.”
“The contrast between the CAR and eXp contracts is stark,” CFA senior fellow Stephen Brobeck said in a statement. “The eXp contract was crafted with the buyer in mind. The CAR contract was crafted with the interests of the real estate agent in mind.” .
The CFA noted that it had sent copies of the eXp Agreement to the California Attorney General, as well as attorneys general and real estate regulators in other states, as a model for consumer-friendly buyer contracts.
This is not the first time the Court of Final Appeal has challenged buyer representation agreements. In February, the group published a critique of more than 40 buyer-side contracts, noting that nearly all contained numerous provisions deemed anti-consumer.
