Contract to closeContingency removal: what it means and when to do it
A contingency lets the buyer cancel the contract and get the deposit back if something goes wrong – the inspection, the appraisal or the loan. Contingency removal is the buyer's written statement that the condition is satisfied or waived. After removal the buyer can no longer cancel for that reason, so the deposit is at risk.
The usual contingencies
Inspection (investigation)
The buyer inspects the property and reviews reports; the buyer can ask for repairs or cancel.
Appraisal
The property must appraise at or above the agreed value; otherwise the buyer can renegotiate or cancel.
Loan (financing)
The buyer can cancel if the loan described in the contract is not approved.
Documents and title
The buyer reviews the seller's disclosures, HOA documents and the preliminary title report.
California: active removal under the C.A.R. RPA
Default timelines
In the C.A.R. purchase agreement (RPA, revised 12/22): investigation, appraisal and loan contingencies 17 days after acceptance unless the parties write another number; seller documents and the preliminary title report 17 days, or 5 days after delivery – whichever is later.
Removal must be in writing
The buyer removes contingencies by signing a contingency removal form (C.A.R. Form CR) – a contingency does not disappear just because the date passed.
Notice to Buyer to Perform
If the buyer has not removed a contingency by its date, the seller may deliver a Notice to Buyer to Perform, which gives at least 2 days; only then can the seller cancel.
Loan is not appraisal
Removing the loan contingency does not remove the appraisal contingency – each is removed separately.
Other states
Many contracts work the other way: a contingency simply ends when its period ends unless the buyer gives notice in time – for example the option period in Texas. Read the contract for each contingency: whether it must be removed in writing, or ends on its own.
Checklist before removing a contingency
- Inspection reports received and read; repair requests answered in writing.
- Appraisal received, and the value supports the price (or the gap is agreed).
- Lender confirms the loan approval in writing – ideally with only closing conditions left.
- Seller disclosures, HOA documents and the preliminary title report received and reviewed.
- Every date written down: removing early gives up rights; removing late lets the seller act.
What the buyer gives up
- The right to cancel for that reason – and, with it, the protection of the deposit.
- Removing a contingency before receiving the reports or documents it covers gives up the rights tied to them.
- If the buyer then fails to close, the seller can claim the deposit under the contract.
Questions about contingency removal
What does contingency removal mean?
The buyer confirms in writing that a contract condition – such as inspection, appraisal or loan – is satisfied or waived, and gives up the right to cancel for that reason.
How many days do buyers have to remove contingencies in California?
Under the C.A.R. RPA (revised 12/22) the default is 17 days after acceptance for the investigation, appraisal and loan contingencies, unless the contract states another number.
What happens if the buyer does not remove contingencies on time?
In California the contract stays in place, but the seller may deliver a Notice to Buyer to Perform giving at least 2 days, and then cancel if the buyer still does not act.
Can the buyer get the deposit back after removing contingencies?
Usually not for the reasons that were removed. That is why the reports, the appraisal and the loan approval should be in hand first.
Is removing the loan contingency the same as removing the appraisal contingency?
No. In the California RPA they are separate; each one is removed separately.
Related guides and tools
ClosingCode builds the contingency dates from the contract you upload and reminds you before each one – and the client in English or Spanish.
Start free trialSource: C.A.R. California Residential Purchase Agreement (RPA, revised 12/22), paragraphs 3L, 8 and 14. Other states and other forms follow their own contract terms.
General information, not legal advice. Ask your agent or a real estate attorney before removing a contingency. ClosingCode is software; it is not a law firm or brokerage.