New Construction Advisory (C.A.R. Form NCA), with detailed explanations

🔹 GENERAL PURPOSE & UNDERSTANDING

  1. What is the New Construction Advisory (NCA)?

Explanation:
The NCA is a C.A.R. disclosure/advisory form that informs buyers about the unique risks and considerations when purchasing newly built homes (tract homes, subdivisions, or custom builds). It clarifies that agents/brokers are not construction experts and that buyers should conduct their own due diligence.

  1. When should the NCA be used?

Explanation:

  • Anytime a buyer is purchasing newly constructed property (even if already completed).
  • If a property is being sold by a builder, developer, or contractor.
  • When construction is in progress or recently completed and not previously occupied.
  1. Is the NCA required by law?

Explanation:
No, it’s not legally required, but it is highly recommended (and often required by brokerages) for liability protection.

  1. Who signs the NCA?

Explanation:

  • The buyer signs to acknowledge the risks.
  • The broker/agent signs to confirm delivery.
    The seller/builder does not need to sign this form.

🔹 ZIPFORMS-SPECIFIC QUESTIONS

  1. Where do I find the NCA form in ZipForms?

Explanation:
In ZipForms:

  • Click “Add Forms”
  • Search “NCA” or “New Construction Advisory”
  • Select C.A.R. Form NCA
  1. Should I include NCA in buyer templates?

Explanation:
Yes. If you frequently represent buyers of new homes, add it to your buyer-side templates in ZipForms.

  1. Can NCA be signed electronically?

Explanation:
Yes. You can send it via DigiSign, DocuSign, or Digital Ink through ZipForms.

  1. Do I need a new NCA for each new build buyer views?

Explanation:
Yes. Each property may have different construction details, risks, or builder requirements, so a separate NCAshould be signed for each transaction.

🔹 RISK & LIABILITY QUESTIONS

  1. Why is a special advisory needed for new construction?

Explanation:
Because new construction involves unique risks, including:

  • Incomplete work or delays
  • Warranty and builder obligations
  • Unknown long-term performance of systems/materials
  • Potential defects not visible at first glance
  • HOA and subdivision rules not yet finalized
  1. Does NCA cover builder warranties?

Explanation:
Yes. It advises buyers to ask about:

  • Builder warranties (structural, roof, systems, workmanship)
  • Duration of coverage
  • What is and isn’t included
  • How claims are made
  1. Does NCA discuss construction defects?

Explanation:
Yes. It warns buyers that new construction may have defects and they should:

  • Hire a home inspector
  • Verify proper permits and approvals
  • Consider consulting a construction expert or engineer
  1. Does NCA explain the agent’s role in new construction?

Explanation:
Yes. It makes clear that brokers and agents:

  • Are not responsible for construction quality
  • Do not verify permits or code compliance
  • Should recommend professional inspections
  1. What if the builder uses their own purchase contract?

Explanation:
The NCA reminds buyers that builder contracts are often non-C.A.R. forms with terms favoring the developer. Buyers should:

  • Read carefully
  • Consider attorney review
  • Compare terms with the C.A.R. RPA
  1. What about HOA or subdivision issues?

Explanation:
The NCA alerts buyers that new subdivisions may have:

  • HOA rules still being drafted
  • Incomplete common areas
  • Possible changes in assessments, dues, and restrictions
  1. What about liens and title concerns in new construction?

Explanation:
The NCA advises buyers to:

  • Confirm that title is clear of mechanic’s liens
  • Ensure contractors and subs are paid
  • Verify that escrow/title clears all builder debts before COE

🔹 PRACTICAL BUYER QUESTIONS

  1. Should buyers get their own inspection on a new home?

Explanation:
Yes. Even brand-new homes may have construction defects. Buyers should:

  • Hire an independent inspector
  • Conduct a final walk-through before COE
  • Verify completion of any agreed-upon repairs
  1. Does NCA cover city/county permits and final approvals?

Explanation:
Yes. It warns buyers to ensure:

  • All permits are pulled and signed off
  • Final inspections are complete
  • A Certificate of Occupancy is issued
  1. Should buyers consult a real estate attorney for new construction?

Explanation:
Yes, especially if the builder requires signing non-standard contracts or when construction is incomplete at the time of purchase.

  1. Can the buyer back out if construction is delayed?

Explanation:
It depends on the builder’s contract. The NCA warns that many builder contracts allow for delays without penalty. Buyers should read carefully and seek legal advice.

  1. Does NCA address future value and investment risk?

Explanation:
Yes. It states brokers cannot guarantee future appreciation, rental income, or resale value of new homes.

✅ BROKER COMPLIANCE CHECKLIST FOR NCA

Task Required? Notes
Add NCA to buyer’s disclosure packet ✅ For all new home purchases
Buyer signs NCA ✅ Acknowledges risks
Broker/agent signs ✅ Confirms delivery
Confirm builder warranties disclosed ✅ Structural, workmanship, systems
Recommend inspections ✅ Even for brand-new builds
Verify permits and certificate of occupancy ✅ Avoid liability
Save NCA in compliance file ✅ For DRE audit and risk management

Disclaimer:
The questions and answers provided are for general guidance only and may not cover all details or apply to every situation. If anything is unclear or you need further clarification, please visit car.org for official resources and the most up-to-date information from the California Association of REALTORS®.

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