Notice of Default Sale Overview
Notice of Default (NOD) and Foreclosure Sales can be a mine field of legal issues. The Home Equity Sales Act and the Foreclosure Consultant Act both have laws and provisions affecting these transactions.
Primary residence buyer of owner-occupied residential property that has an NOD filed on it.
An agent may represent a buyer of a residential, owner-occupied property that has a Notice of Default filed on it, if it is going to be the buyer’s primary residence. The standard Purchase Agreement, with all standard forms and disclosures are used for these transactions.
Investor buyer of owner-occupied residential property that has an NOD filed on it.
The recording of the Notice of Default (NOD) always triggers the provisions and requirements of the Home Equity Sales Act (HESA). All additional disclosures must be given, per state law.
Under the March 2008 ruling of Schweitzer v. Westminster Investment, a buyers' agents MAY represent investors without obtaining the surety bond required under the home equity sales contracts law. Buyers and their agents must nevertheless comply with the other requirements of the home equity sales contracts law. Most notably, buyers and their agents should use C.A.R.'s standard form Notice of Default Purchase Agreement (NODPA) revised In the April, 2008 CAR forms release.
Therefore, when an agent is working with an investor buyer who ultimately pursues an offer for an Owner-Occupied residential property that is a short sale AND has a Notice of Default (NOD) filed on it, CAR recommends using:
- Notice of Default Purchase Agreement (NODPA)
- Notice of Cancellation of Notice of Default Purchase Agreement (HENC)
- Declaration and Proof of Real Estate License (DPL)
The NODPA includes all 3 forms. Here is a brief description of each of the forms:
The NODPA is the actual purchase agreement printed in the statutorily required format.
The HENC is the form the seller uses if the seller desires to rescind the sale within the statutory period.
The DPL form allows the buyer’s agent to comply with the statutory requirement to declare and prove their licensed status.
Note: The HEAA, that was attached to the NODPA, has been entirely removed.
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Investor Buyer's Forms to Download
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