California Association of Realtors Releases New Form to Address Closing Date Issues Amidst Coronavirus Outbreak
The California Association of Realtors (CAR) has released a new form in order to assist homebuyers and sellers during the ongoing outbreak of COVID-19 (aka coronavirus).
The form, entitled the Coronavirus Addendum/Amendment (Form CVA) and drafted without input from the California Land Title Association, is intended for use when circumstances relating to the coronavirus affect the closing date of a real property transaction and allows buyers and sellers to agree to extend escrow for a default period of 30 days.
While the form purports to allow either party to unilaterally cancel the purchase agreement upon expiration of the agreed upon extension, title companies will nevertheless still require mutual instructions from the parties in order to facilitate such a cancellation, and the form therefore does not take the place of mutual escrow instructions.
In addition, the form contains several optional clauses. The first optional clause states that the buyer and seller can mutually agree to cancel the agreement, while an additional optional clause allows a buyer and seller to cancel the agreement after removing a loan contingency if the inability to fund is caused by a loss of income related to COVID-19.
The rapid release and use of the form comes as shelter in place orders have popped up throughout California in an effort to slow the spread of COVID-19, with cities and counties ordering individuals to shelter at their home and only leave to provide or receive essential services and governmental agencies, including county recorders, modifying their hours or operations in response.