California Purchase Agreement Probate Addendum

The Purchase Agreement Probate Addendum (form-PAPA) is a relatively new form. I believe it was released for use in the middle of 2019.  A draft copy is available to see on the California Association of Realtors website here.  You can purchase a copy there as well even if you are not a licensed Realtor or working with a Realtor. However, we do recommend our clients work with licensed Realtors and preferably ones with significant probate sales experience.

The form is a game changer in the world of real estate sales in probates in California. Let me explain why!

In the old days (i.e. before June of 2019), though I always ask my probate Realtors to put in the listing notes that they request offers to be made on form-PPA (the probate purchase agreement), people invariably put in offers on the standard form-RPA. Why does this matter? The standard sales form does not have the probate protections that are needed for the Personal Representative.  Since the PR has a fiduciary duty they need the protections such as court confirmation may be required.  Thus form-PPA has always been the gold standard.

The problem is the offers invariably come in on form-RPA and the seller then has to try to counter with a form-PPA which is awkward or, in some cases, try to counter with a homemade addendum with the probate language. In any event, it wasn’t nearly as clean as if the form-PPA had just been used in the first place.

So the CAR came up with a solution!  It is form-PAPA.  The Purchase Agreement Probate Addendum has the key probate language in it. Again, here is the link to it. The main thing it does is lays out the court options.  Is court confirmation required or not?

This is beyond the scope of today’s blog but the quick summary is, at least on my cases, probate court generally MAY be required.  The choices at 3B are:

(2) Court confirmation REQUIRED;

(3) Court confirmation NOT REQUIRED.

However, read further and item (3) really means court confirmation MAY be required.  In my cases that’s the box you usually will check as we almost always get our clients FULL IAEA authority. As discussed in other blog posts that is key in a probate when there is real estate.

Box (2) would be checked in a case where the person has limited IAEA authority or not IAEA authority… which I have still never seen in 26 years of doing this type of work.  Also, you might check box (2) if the PR themselves is trying to buy the house or maybe some family members as a way of protecting the PR.

So, the bottom line memo to Realtors who are probate experts and probate lawyers is to add form-PAPA to your bag of tricks! It can definitely come in handy!

-John Palley


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