The Homebuyer Protection Act applies to all new residential construction. It also applies to any residential property where $50,000 in remodeling or renovation has been done within 90 days of a sale. If the property falls into one of these two categories, the Act applies to the property and a CCB “Notice of Compliance with the Homebuyer Protection Act” form must be given to the buyer.

The form has two sections: “A” and “B.” Section “A” informs the buyer that the provisions of 87.007 do not apply to the particular sale. The Act applies to the sale if any work for which a lien might attach was completed within 75 days of the date of sale. The date of sale is the date the buyer becomes bound on the contract. If the seller knows no person may file a lien against the property, they may check the box in section A. Section “B” informs the buyer that the Act does apply to the particular sale. Section “B” also gives the buyer notice of how the seller will comply with the Act. There are five ways listed on the form for the seller to comply. The seller is free to choose any of the five. Click here to see a flow chart of timelines and choices involved.

The process just described can be confusing to real estate licensees if not addressed one step at a time. The first question, asked at the time of listing, is: does the Act apply to the property? That is, is this property new residential construction or has it had $50,000 or more worth of improvements within the last 90 days? If the answer is yes, the Act applies to the property and the seller will need to get the CCB “Notice of Compliance with the Homebuyer Protection Act” form. The seller can get the form by clicking here.

If the Act applies to a sale, which of the allowed protections listed in Section “B” of the form might best suit the seller’s circumstances is a business question for the seller. To the extent that answering that business question requires legal knowledge, it is beyond the expertise of a real estate licensee. Do not let your client involve you in the unauthorized practice of law. That said, you should know enough about the Act to advise your client on its basic operation so they can make informed choices.
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