Association-drafted forms protect consumers and members

By C.A.R. President Melanie Barker

Recently, an opinion piece written by a real estate coach about the dangers of using trade association-created forms appeared on the Inman website. Though clearly presented as opinion, this article is full of speculative alarm-inducing statements about what constitutes improper legal practice by someone who is not an attorney, let alone an attorney who specializes in antitrust. Though the article points to clauses in several states’ forms (not California’s), it fails to explain how they harm consumers. Mostly, the author speculates that the existence of similar language in forms from various state associations “suggest a dangerous level of collusion between real estate companies.” This statement and others like it are strewn throughout an article high on inflammatory conjecture and low on fact. We believe it’s important to focus on facts.

There are multiple benefits to using forms drafted by attorneys who work for real estate trade associations. The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) has a long history of developing forms for use in California real estate transactions. C.A.R. forms help California buyers and sellers, as well as our members, precisely because they offer standardized language with a variety of options to fit any situation. C.A.R. lawyers consult with practicing REALTORS® as well as other real estate attorneys so that our forms address real-world issues our consumers face. It’s simply good business practice to hear what consumers want and need when developing products for their use ― the opposite of anti-competitive.

Real estate transactions are complex, especially in California. C.A.R. forms are drafted to cover a broad array of situations, and to enable buyers and sellers to customize those documents to fit their particular situations. While C.A.R. has always continued to improve upon and streamline its forms, the myriad details present in any transaction mean that Association forms must be both flexible and clear enough to protect clients in any given situation. To cite just one example, C.A.R. offers members nine different purchase agreements, allowing the member to choose an appropriate pre-printed agreement for everything from standalone houses to vacant land to business opportunities. 

Preprinted language found in Association forms also creates efficiencies for any transaction because such language reflects common practices. Consumers and brokers don’t have to spend their time or financial resources to hire their own attorneys to navigate the complexities inherent in a transaction to stay up to date on legal changes or to draft new language whenever terms change during a transaction.

It’s also important to note that no one ― member or consumer ― is required to use any C.A.R. form for any transaction. Moreover, buyers and sellers who do choose to use C.A.R. forms are free to make changes to those forms to fit their transaction, whether through filling in blank provisions or providing amendments. Finally, some brokerages in California draft their own forms language or create additional disclosures for their clients. In other words, if California REALTORS® need something other than C.A.R.’s forms, they’re free to draft appropriate documents or make changes as they see fit.

Shifting away from using association-developed forms is the opposite of consumer friendly. If brokerages had to pay for the creation and constant legal upkeep of their own forms, those costs would almost certainly be passed on to consumers. And rather than be assured that an organization dedicated to homeownership has created the most effective forms to be used for any real estate transaction, consumers would likely need to retain their own attorneys to ensure they were protected. If anything, litigation could well increase given the multiple documents emanating from different sources involved.

Given the recent changes in industry practice and the current media environment, it is not surprising to encounter opinion-based writing everywhere. But rather than stir up fear and anxiety with what-ifs, we prefer to let the facts ― and the forms ― speak for themselves. Association-drafted forms exist to protect consumers and members, and to make the promise of homeownership a reality for those who want it. And that’s a fact.

October 21, 2024