Here’s a detailed breakdown of possible questions about the Residential Units Addendum, with explanations for each:
- What is the purpose of the Residential Units Addendum?
It specifies important details about the number, type, and condition of residential units on a property, ensuring all parties agree on what is included in the sale.
- When should the Residential Units Addendum be used?
It’s used when the property being sold has multiple residential units, such as a duplex, triplex, fourplex, or mixed-use property that includes residential units.
- Why is it important to specify the number of units in writing?
Written confirmation prevents disputes by ensuring buyers and sellers agree on the exact number of legal and permitted units.
- How does the addendum address permitted vs. unpermitted units?
It includes disclosures about whether each unit is permitted, unpermitted, or nonconforming, which can impact value, financing, and future use.
- Does the addendum cover unit occupancy status?
Yes, it identifies whether units are occupied by tenants, owner-occupied, or vacant, which affects possession timelines and rental income expectations.
- Can this form disclose rent amounts for each unit?
Yes, it can list the current rent for each occupied unit, helping buyers assess income potential.
- Does the form address lease agreements?
It provides space to note if written leases exist and the length of each lease, ensuring buyers know their obligations toward tenants after closing.
- How does the addendum handle tenant deposits?
It clarifies the amount of security deposits held and the requirement to transfer them to the buyer at close of escrow.
- What happens if an unpermitted unit is discovered after closing?
The addendum protects both parties by ensuring any disclosures about unit legality are made before closing, potentially limiting liability.
- Does the addendum address condition of the units?
It may include statements about the general condition of each unit and whether inspections have been conducted.
- How does this addendum relate to financing?
Lenders often require confirmation of the legal number of units; discrepancies can delay or prevent loan approval.
- What about rent control laws?
The addendum can include disclosures if the units are subject to rent control, as this affects future rent increases and eviction rules.
- Is it required for single-family homes with ADUs?
Yes, if an accessory dwelling unit (ADU) is part of the sale, the addendum can be used to document it as a residential unit.
- What if a tenant refuses to provide access for inspections?
The addendum can reference the process for gaining access and set expectations for inspections before closing.
- Does this addendum impact the transfer of utilities?
It may address whether utilities are separately metered for each unit or shared, which affects post-sale management and expenses.
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®.
Alliance Bay Realty & Alliance Bay Funding – The Best 100 Percent Commission Real Estate & Mortgage Company
At Alliance Bay Realty, we are a 100 percent commission real estate brokerage designed for agents who want to keep 100 percent of your commission. We’re a zero split real estate brokerage and a real estate broker with no splits, giving you the freedom to earn more and keep more. As a flat fee real estate broker, we offer the best support, training, and technology without taking your hard-earned income. Whether you’re looking to join a 100 percent commission real estate company or searching for the best brokerage for real estate agents, we are the clear choice.
For mortgage professionals, Alliance Bay Funding is a 100 percent commission mortgage broker that offers the mortgage broker 100 percent split model you’ve been looking for. We are a no split mortgage loan company with no desk fees, making us the best 100% commission mortgage company in the business. As a mortgage broker with no desk fees, we give you the tools, lender access, and support you need to close more loans while keeping more of your income.
Whether you’re a real estate agent searching for a no commission split real estate brokerage or a loan officer looking for a mortgage company with the highest splits, Alliance Bay Realty and Alliance Bay Funding are the best 100 percent commission companies to grow your business.