Removing contingencies in California
This is the point in a California deal where the buyer’s deposit stops being safe. It is also the point most often misunderstood, because California does it differently from nearly everywhere else.
What removal actually gives up
Each contingency is a defined route out of the contract with the deposit intact. The investigation contingency covers what the property turns out to be; the appraisal contingency covers what it is worth; the loan contingency covers whether the financing arrives. While a contingency is in place, the buyer can walk on that basis and expect the deposit back.
Removing one closes that route. A buyer who removes every contingency and then cannot close is exposed to the deposit, which is why the removal conversation deserves more care than its routine paperwork suggests.
What a seller does when removal does not arrive
Because the deadline passing achieves nothing, a seller whose buyer has gone quiet has one route: deliver a Notice to Buyer to Perform. That notice starts a short period — two days by default, unless the agreement specifies otherwise — after which ending the contract becomes available if the buyer still has not acted.
The order matters and cannot be skipped. A seller who ends the deal because a date went by, without having delivered that notice first, has acted without the contractual basis to do so, and has handed the buyer an argument.
Partial removal is normal
Contingencies do not have to be removed together. A buyer commonly removes the investigation contingency once inspections are settled while keeping the loan contingency until the lender is firm. The form identifies which are being removed, so a buyer removing one is not removing the others by implication.
Default contingency periods, measured from acceptance
| Contingency | Default | Covers |
|---|---|---|
| Investigation of property | 17 days | What the inspections find. |
| Appraisal | 17 days | The value the lender’s appraiser assigns. |
| Loan | 21 days | Whether the financing actually materializes. |
Forms this touches
Named so you know which document the conversation ends in. Their text is not reproduced here.
- CR — Contingency Removal
- NBP — Notice to Buyer to Perform
Questions that come up
Do California contingencies expire automatically?
No. They are removed only by a signed removal form delivered to the other party. If nobody signs one, the contingency continues to exist regardless of the date.
What can a seller do if the buyer will not remove contingencies?
Deliver a Notice to Buyer to Perform, which gives the buyer a short period — two days by default — to act. Only after that period has run does the right to end the contract become available.
Can a buyer still walk after removing contingencies?
A buyer can always stop performing, but the protection is gone. Walking after removal generally puts the deposit at risk, subject to the limits California law places on how much a seller may keep.
Describe the change in plain English
Amendly drafts the California amendment or addendum for your deal from a sentence. You review every line before it goes anywhere.
Draft your first amendmentRelated in this guide
- C.A.R. Form CR — Contingency RemovalThe only thing that removes a contingency in California. Why a deadline passing does nothing, and what signing this form gives up.
- C.A.R. Form NBP — Notice to Buyer to PerformThe form a California seller has to deliver before a stalled transaction can be ended, how long it gives the buyer, and when the clock starts.
- Backing out after removing contingenciesWhat a California buyer is actually exposed to after signing a contingency removal, and the 3% rule in Civil Code § 1675 that limits what a seller may keep.
- When a California contingency deadline passesA passing deadline does not remove a California contingency or allow cancellation. What a seller has to deliver first, and how long it takes.
Where this comes from
This page describes how California residential transactions typically work. It is general information, not legal advice, and it is not a substitute for an attorney on a specific deal. Amendly is not a law firm. Forms are named and described here; their text is not reproduced. Amendly is not affiliated with or endorsed by the California Association of REALTORS® or any state agency.