CALIFORNIA ASSOCIATION OF REALTORS® NEW AND UPDATED FORMS SUMMER 2025

New and Updated Forms

As Summer officially kicks off, we have an update on all things regarding the forms that are changing. This article will be split into two Chapters. Chapter I will deal with the changes that have been made to forms guiding transactions in the landlord-tenant and property management space. This is one of the more active spaces where the law is changing in 2025, and this is reflected in the updates made to the standard forms used in this area. Chapter II will discuss some of the important changes with the transactional type forms and, particularly, those being changed in light of the various hot-button issues in the industry, i.e., buyer-broker compensation agreements under new law AB 2992; forms that are impacted by the new Clear Cooperation Policy adopted by the National Association of REALTORS® (“NAR”); and forms that are changing related to issues raised by the infamous California wildfires.

Chapter I

As previously noted, Chapter I discusses changes to the C.A.R. standard forms in the property management and landlord-tenant arena. This is one of the more active areas in terms of changes to the law for 2025, which explains why there are numerous changes being made to the standard forms. The relevant changes to the law have led to many of the changes to the forms. AB 2493 (placing new compliance requirements on landlords when it comes to screening fees for prospective tenants), AB 2801 (placing new requirements on landlords to document the condition of the property at move-out and move-in to make deductions against the security deposit), and AB 2747 (requiring certain classes of residential landlords to offer positive rental payment reporting) are a few of such changes in the law.

Move Out Inspection (“MOI”)

The MOI has been changed to accommodate new requirements brought by AB 2801 that requires residential landlords to take and produce pictures of the rented premises upon tenant move out in order to make deductions against the security deposit. The majority of the substantial changes are made on the first page with minor edits being made to the “Move out condition” checklist.

Additions to the first page of the updated MOI outline and explain the requirements of AB 2801 in the section entitled “Additional Documentation.” As the new MOI notes, as of April 1, 2025, the landlord must take pictures of the premises upon move out of the tenant within a reasonable time after the tenant has relinquished the premises, but before any cleanings or repairs are made that may be deducted from the tenant’s security deposit. Second, the landlord must then take pictures of the property after cleaning and repairs have been made and, if deductions are made from the security deposit, the landlord must provide an itemization of those deductions along with both sets of pictures (the “before and after” pictures). Further, beginning on July 1, 2025, a third set of pictures will also be required and provided to new tenants at the inception of new tenancies (the “Third Set of Pictures”). The Third Set of Pictures must be taken immediately prior to, or at the inception of the new tenancy and, if the landlord makes deductions to the security deposit at the end of the tenancy, this Third Set of Pictures must also be provided to the tenant—in addition to the before and after pictures.

Move In Inspection (“MII”)

Here, the changes are less substantial than those made to the MOI but also address AB 2801. In particular, language was added to the first page regarding the requirement for the landlord to take pictures of the property immediately prior to, or at the inception of the tenancy. Importantly, as noted in the MII, these photos are not required to be attached to the MII, notwithstanding that they must be provided after moving out in the event the landlord were to charge against the tenant’s security deposit for any repairs or cleaning performed to the property. Other minor changes to the “Move in condition” checklist mirror those made to the MOI. As with the MOI, the MII also adds a new section for the tenant to make remarks regarding the items noted in the checklist.

Pre-Move Out Inspection (“PMOI”)

Two changes to the PMOI are worth noting. First, minor changes have been made to the “Pre-move out condition” checklist. These minor changes reflect the same changes made to the MOI and MII checklists noted above. Second, and more substantial, language was added to this form in order to notify the tenant that the landlord may make deductions from the security deposit for damage that occurred between the date of the pre-move out inspection and the termination of the tenancy. This new language also notes that deductions may be made where damage to the property was hidden or obscured by the possessions of the tenant at the time the inspection was performed.

Chapter II

Residential Purchase Agreement (“RPA”)

One of the most widely used C.A.R. forms is the RPA. As readers will remember, following the settlement of the Sitzer-Burnett case (the “NAR Settlement”) last year, and the subsequent changes to California law this year (AB 2992, which requires mandatory Buyer-broker agreements), the RPA went through a thorough overhaul to address the new structure of the relationship between home buyers and their agents. This year, the changes are somewhat minor compared to significant overhaul that occurred last Summer, and the additional changes made in the Winter form release. That being said, there are potential changes being considered by C.A.R. that are substantial, and REALTORS® may have a unique opportunity to influence what ultimately happens to Paragraph 3G(3) of the RPA.

Changes to the RPA related to the Settlement and AB 2992:

Language was added to Paragraph 18A(1) to clarify that when compensation agreed to be paid to the buyer’s broker is a percentage, the final amount of compensation due is calculated based on the final purchase price. Additionally, language was added to identify that any amount the seller agrees to pay the buyer’s broker, offsets the amount that the buyer is obligated to pay the broker under the written buyer-broker compensation agreement.

Change to the RPA related to fire hardening measures:

As anyone who practices real estate in the State of California will know, wildfires are an extremely pressing issue (and have been for some time). From fallout in the insurance industry to the emergency orders from local and state government executives, fire issues remain at the forefront of the conversation. In 2025, this reality is reflected in the forms. In the RPA, changes were made to Paragraphs 11(C)-(D) to account for new checklists to the Fire Hardening and Defensible Space form and the new Home Fire Hardening and Defense form (both of which will be discussed in more detail below).

Things to keep an eye on in the RPA in 2025:

One more thing needs to be said about the RPA, although technically, it is not a change to the form. Paragraph 3(G)3 is being monitored closely by C.A.R. throughout the rest of 2025.

The initial overhaul of the RPA in July 2024 included a requirement for the buyer to provide a copy of the compensation portion of their agreement with their broker if it was requested by the seller. This requirement, however, faced objections by practitioners, many of which were raised on the buyer side. Essentially, many buyers and their agents felt that while the law, the MLS, and the Settlement required them to have a buyer-broker representation agreement in place that specified buyer-broker compensation, the new laws and the Settlement in no way required them to provide the full details of that compensation to the seller. An approach that amounts to: “You get to know I have an agreement with my broker for compensation, but you do not get to know how much.”

Based on these concerns, in December 2024 the form was revised so that buyers had to make an affirmative representation that a buyer representation agreement specifying compensation existed and that the agreement was applicable to the seller’s property, but there was no disclosure of the specific details of the buyer broker’s compensation. Unsurprisingly, there was a pushback from the seller side of transactions. Essentially, the seller side pushback argues that the entire Settlement, and the new laws stemming from it, are about ensuring industry transparency when it comes to broker compensation. As such, the argument claims that withholding the compensation details of the buyer-broker agreement flies in the face of transparency being sought and puts individual sellers, as well as the industry as a whole, at risk of further litigation when it comes to anti-trust concerns.

This Law Firm is not taking a position at this time on which one of these positions is stronger (nor are the authors endorsing either position). These Paragraph 3G(3) issues are mentioned here because C.A.R. explicitly stated in multiple forums at the C.A.R. Spring Business Meetings that it will be monitoring transactions in the field concerning how 3G(3) plays out in transaction. Further, C.A.R. stated it is seeking input from practitioners on this specific issue. While no path of action has been decided regarding how to change Paragraph 3G(3) (or if it will be changed at all), C.A.R. is considering several options. Potential options include: taking the seller’s commitment to pay the buyer’s broker out to allow it to “stand on its own;” reverting to a previous version of the RPA; or leaving the 3G(3) provision as is. Long story short, agents on the buyer and seller side should keep note of how Paragraph 3G(3) is functioning in the field. C.A.R. is explicitly requesting input on this issue and practitioners have real opportunity to provide real-world insight on the potential revisions. C.A.R. has indicated it will provide an update on where things stand at its Fall Business Meetings.

Fire Hardening and Defensible Space Disclosure and Addendum (“FDHS”) and the new Home Fire Hardening (and Retrofit) Disclosure (“HFHD”)

Here, given the significant overlap of the changes being made to the FDHS and the new HFHD disclosure forms, they will be discussed together. Since 2021, state law has required the disclosure of fire hardening vulnerabilities for properties located in high and very high fire hazard zones, where a Transfer Disclosure Statement is required by law, and where the property contains residential properties of 1–4 units. As of July 1, 2025, anyone selling these properties will also have to provide a list of low-cost retrofits that could mitigate fire hardening vulnerabilities and provide disclosure of any retrofits that have been made to the property during the time the seller owned the property. (Gov. Code, §§ 51182 and 51189.) Updates to the FDHS and the new HFHD incorporate the low-cost retrofits are identified by the State of California into the forms.

Multiple Listing Service Addendum (“MLSA”)

The MLSA has been amended to account for the new Clear Cooperation Policy guidance from NAR. Note: While the other forms discussed in Chapters I and II are set for a June release, this from is being held for now and will release sometime between June and December 2025. C.A.R. has taken a “wait-and-see” position to monitor the changes and fallout from NAR changing its Clear Cooperation Policy that is discussed below.

In March 2025, NAR announced an update to its Clear Cooperation Policy: the Multiple Listing Options for Sellers. Essentially, under its new position, sellers can choose to delay marketing their property under what is called a “delayed marketing exempt option.” The delayed marketing exempt option allows sellers to hold off on marketing their property via Internet Data Exchange (“IDX”) for a set time (MLSs will have local discretion to determine the time). Sellers can also opt for a “office exclusive exempt listing” which permits the seller to only market the property exclusively through a broker’s system for a set period of time. Under both options, a full disclosure of the benefits of full exposure marketing on the MLS and IDX must be signed by the seller.

Here, the MLSA was updated in Paragraph 3 to provide more nuance to the definitions of public and private marketing. New language was also added to address and explain the new CCP Delayed Marketing category. Further, the details of the new CCP are made explicit and explained in Paragraph 4 at length with separate new sections for Delayed Marketing Limited Exposure, Coming Soon Marketing, and Office Exclusive Limited Exposure. New Paragraph 5 now provides an explicit instruction from the seller to the seller’s agent on which marketing option to follow.