New Construction Disclosure & Addendum

(Note: Use this document when you are selling a newly constructed completed home that is not subject to a public report or not in an exempt subdivision.)

1. Extensions of Closing Date.  Buyer and Seller agree the Closing Date may be extended until the date that is 10 days after issuance of a certificate of occupancy from the applicable local governmental entity.  Seller shall promptly notify Buyer of said issuance.  In no event shall Buyer be obligated to close escrow more than 1 year after Acceptance, unless both parties mutually agree to the contrary.

2. Selection Timing.  Buyer agrees to make any color and optional item selections, if any, from the choices offered by Seller within 14 days after such choices are offered.  If Buyer fails to make such selections within this time period, Seller may make such selections.

3. Upgrades & Associated Deposit Increase. If Buyer requests any changes or upgrades from Seller and Seller agrees to them, Buyer and Seller shall execute an Upgrade Addendum, and Buyer shall deposit into escrow a cash deposit against the agreed cost (“Option Deposit”). The Option Deposit shall be held in escrow and be paid to Seller at closing as an increase in Purchase Price.  If escrow fails to close because Buyer defaults, the Option Deposit shall go to Seller. In the event of Seller default, any Option Deposit shall be returned to Buyer.

4. Changes.  Buyer acknowledges Seller reserves the right to make changes mandated by building inspectors or other government officials, and Buyer's consent shall be required only if such changes are material.  If Buyer does not consent to said material changes, Buyer shall have the right to cancel escrow and recover all deposits.  Acceptance of title by Buyer at Close Of Escrow shall be deemed consent to said changes.

5. Proposition 65 Warning.

“MATERIALS INCLUDED IN THE CONSTRUCTION OF THIS HOUSE WILL EXPOSE YOU TO FORMALDEHYDE, A SUBSTANCE KNOWN TO CAUSE CANCER. FURTHER INFORMATION MAY BE OBTAINED FROM THE BUILDER/SELLER.”

For further information on this topic, consult the Homeowner's Combined Information Guides.

6. Entry on the Property. Buyer understands no interference with the work occurring at the Property is permitted, and Buyer shall not enter the construction site.  Should Buyer or Buyer's guests or agents visit the Property prior to Close Of Escrow, Buyer agrees to indemnify and hold Seller harmless from any and all liability, claims, demands, damages and costs arising from, or related to, said entry upon the Property.  Buyer further agrees no custom work may be performed by Buyer on the Property until after the Close Of Escrow.

7. Warranty.

A. Pursuant to Chapter 2 of Title 7 of Part 2 of Division 2 of the California Civil Code, commencing with section 896, Seller warrants the Property against defective materials and workmanship for a period of one year from the date of possession. Seller's warranty only applies if Seller receives notice of defects within this one-year warranty period.

B. The following shall not be considered defects: (1) Items inspected and approved during Buyer's final inspection; or (2) thereafter, minor settling cracks, damage caused by Buyer or Buyer's guests or agents, including movers, or damage due to alterations or additions made other than by Seller; or (3) any defect expressly accepted by Buyer at Close Of Escrow.

C. THE SELLER'S WARRANTY IS PROVIDED IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS, AND IN LIEU OF ANY STRICT LIABILITY OF SELLER IN TORT, TO THE EXTENT SUCH LIABILITY MAY BE DISCLAIMED UNDER CALIFORNIA LAW. THE SELLER'S WARRANTY ALSO EXCLUDES LIABILITY FOR CONSEQUENTIAL DAMAGES TO THE EXTENT SUCH LIABILITY MAY BE DISCLAIMED UNDER CALIFORNIA LAW.

8. Procedures for Construction Defects.

A. “Notice: California law establishes procedures that must be followed prior to the filing of any action related to a claimed construction defect.  These procedures impact the legal rights of a homeowner. These procedures may be found in Title 7 of Part 2 of Division 2 of the California Civil Code commencing with § 895.”

B. By signing this document, the parties are instructing Escrow Holder to insert in the deed the language specified in quotes above.

C. Attached to this document is a copy of California Civil Code §§ 895 to 945.5.

D. By initialing below, Buyer and Seller acknowledge each has received and read this paragraph and the copy of California Civil Code §§ 895 to 945.5 provided.

Buyer's Initials __________/____________  Seller's Initials __________/____________

9. Agent for Notice. Claims and requests for information relating to construction defect allegations made pursuant to Chapter 4 of Title 7 of Part 2 of Division 2 of the California Civil Code commencing with § 910 may be made to the following person at the following address:

__________________________________________________________________________________________________________________________________________________________________________________________________________________________________

By initialing below, Buyer and Seller acknowledge each has read and understands this paragraph.

Buyer's Initials __________/____________  Seller's Initials __________/____________

10. Non-Adversarial Procedure of California Civil Code: Seller elects to engage in the non-adversarial procedure set forth in California Civil Code section 914 for construction defect claims.

11. Insulation.  The Federal Trade Commission requires that a new home seller must include in every new home sales contract the following information regarding type, thickness, and R-value of insulation to be installed in each part of the residence.

Exterior Walls:     Type ___________  Thickness  ___________  R-Value  ___________

Ceilings:               Type ___________  Thickness  ___________  R-Value  ___________

Interior Walls:       Type ___________  Thickness  ___________  R-Value  ___________

Other________:   Type ___________  Thickness  ___________  R-Value  ___________

12. Final Inspection.  During Buyer's final inspection, Buyer may find minor defects in the Property or corrective work that Seller agrees to complete.  Buyer shall document such corrective work in writing, and Seller shall sign this document acknowledging what corrective work, if any, Seller agrees to complete.  Said minor defects or corrective work shall not cause a delay in the Close of Escrow or entitle Buyer to withhold any portion of the Purchase Price.  Rather, Seller shall, prior or subsequent to the Close of Escrow, diligently complete all agreed upon corrective work.

Seller has completed this disclosure and addendum on the date written below.

Seller____________________________            Date_________________

Seller____________________________            Date_________________

Buyer acknowledges receipt of this statement as of the date written below.

Buyer____________________________            Date_________________


Buyer____________________________            Date_________________