California short sales and CA Civil Code 1695 - Posted by Sara

Real Estate Investing Real Estate Law
1

Posted by Sara on September 22, 2009 at 24:20:28:

I am planning to buy and resell short sale residential homes in the Los Angeles area. I’m wondering about the purchase agreement and compliance with California Civil Code 1695. Specifically:

  1. Can I create an S-corp to buy these houses instead of buying in my own name? While I would like to do so, my concern is CA Civil Code 1695.15 and 1695.17. If my S-Corp was the purchaser, would I be considered the “representative” of my entity, and therefore have to have a CA Real Estate Sales License (which I do not have)?

  2. Can I use my own purchase agreement? I don’t have to use the C.A.R. form NODPA Notice of Default Purchase Agreement, do I? (I don’t think I will be buying properties listed with Realtors.)

  3. CA Civil Code 1695.16 says that any provision of a contract that tries to limit the purchaser’s liability for “damages” is void. What does “damages” mean? Is it okay for my contract to give me an out so that I don’t have to complete the purchase? Say, if the bank does not accept my offer or if I don’t find someone to resell to, then I wouldn’t have to buy, and the seller understands their property might continue to foreclosure. Would a clause like that be okay?

Thanks for your answers!