C.A.R. Form CC is the California Association of REALTORS® “Cancellation of Contract, Release of Deposit and Joint Escrow Instructions” — the one-page document used to end a California residential purchase agreement, decide who gets the earnest money, and tell the escrow holder to close the file.1California Association of REALTORS. List of Standard Forms It does three things at once, and escrow cannot release a dollar of your deposit without it or an equivalent signed by both sides.
When Form CC Comes Into Play
Any California residential purchase agreement that ends before close of escrow should be wrapped up with a Form CC. The most common trigger is a contingency-based cancellation: a failed home inspection, a low appraisal, or a buyer who cannot lock in financing by the contractual deadline. A buyer who cancels before the contingency removal deadline is generally entitled to the full deposit back.
The form also handles the messier endings. A seller who backs out, a mutual walk-away after repair negotiations collapse, or a buyer default where the seller intends to claim liquidated damages all run through the same document. Who pulled the plug and why affects the deposit split, not the paperwork used to record it.
Getting a Copy of the Form
Form CC is a proprietary C.A.R. document, not a public download. Licensed REALTORS® who belong to C.A.R. pull it from zipForm Plus using their membership credentials.1California Association of REALTORS. List of Standard Forms If you are buying or selling without an agent, you will not be able to open the form yourself; your escrow officer or a real estate attorney can supply it or draft an equivalent cancellation and release. In practice, the listing or buyer’s agent usually prepares and circulates it.
Filling Out Form CC
Before you start, pull three things from the original Residential Purchase Agreement: the signing date, the full property address with any unit number, and the legal names of every buyer and seller exactly as written on the RPA. Name mismatches between the cancellation and the escrow file will slow things down and can get the form kicked back by the title company.
Identifying Who Is Cancelling
The first section asks who is cancelling and under what authority. You check whether the buyer or seller is initiating, and you point to the specific contract provision — usually a contingency clause (inspection, loan, or appraisal) or a mutual termination. This matters because it drives who has the better claim to the deposit. A buyer cancelling inside an active contingency window has a clear contractual right to a refund; a buyer cancelling after removing contingencies does not.
Splitting the Deposit
The deposit section is where most fights happen. You enter the total deposit and specify the split: all to the buyer, all to the seller, or a stated amount to each. Checkboxes let you assign specific dollar figures. Both buyer and seller must sign off on that distribution. The escrow holder is neutral and will not disburse funds on one party’s say-so.
When cancellation follows a timely contingency, the full deposit usually goes back to the buyer. When the buyer defaults after removing contingencies, the seller may claim some or all of the deposit as liquidated damages, within the cap described below. Whatever the parties agree to gets memorialized here.
Escrow Instructions and Signatures
The final block is the joint instruction to escrow, authorizing the company to disburse per the distribution above and close the file. Every buyer and seller named on the RPA has to sign. If a party is a trust, LLC, or corporation, the authorized signatory signs in a representative capacity. Once signatures are collected, the completed form goes to the escrow officer.
How Much the Seller Can Keep in a Default
When a buyer defaults, the seller’s remedy is usually capped by the liquidated damages clause in the standard C.A.R. RPA. For a dwelling of no more than four units that the buyer intended to occupy, the seller can retain the deposit as liquidated damages up to 3 percent of the purchase price.2California Legislative Information. California Civil Code 1675 – Liquidated Damages Anything above 3 percent must be returned to the buyer.3California Association of REALTORS. Residential Purchase Agreement
On a $600,000 home, that cap is $18,000, even if the buyer put down $30,000. The liquidated damages clause is optional and has to be separately initialed by both buyer and seller when the RPA is signed. If neither party initialed it, the seller’s remedy for a buyer default is a lawsuit for actual damages, not automatic retention of the deposit.
If the Other Party Won’t Sign
This is where cancellations stall. The buyer wants the deposit back; the seller insists the buyer defaulted. Neither will sign Form CC with the other’s split, and the escrow company sits on the money.
The opening move is a written demand under California Civil Code Section 1057.3, sent to the refusing party, asking them to execute the release. That demand starts a 30-day clock. A party who refuses without a good faith basis can be held liable for the full deposit, treble damages between $100 and $1,000, and the other side’s reasonable attorney’s fees.4California Legislative Information. California Civil Code 1057-3 If the refusing party genuinely believed they were entitled to the money, those penalties do not apply, and a court or arbitrator decides whether the dispute was legitimate.
Interpleader by the Escrow Company
If the standoff drags on, the escrow company may file an interpleader — a lawsuit that deposits the disputed funds with the court and asks a judge to decide who gets them. The escrow holder deducts its own attorney’s fees and costs from the deposit and gets dismissed from the case.4California Legislative Information. California Civil Code 1057-3 The buyer and seller then litigate against each other over the remainder.
The cost sting is real. Escrow’s legal fees — often several thousand dollars — come off the top of the deposit before anything else happens. Then both sides pay their own lawyers to fight over what is left. On a $10,000 or $15,000 deposit, combined legal costs can rival or exceed the money in dispute. That math is the strongest argument for negotiating a compromise on Form CC instead of digging in.
Mediation and Small Claims
Most C.A.R. purchase agreements include a mediation clause that requires the parties to try mediation before filing suit or demanding arbitration. For smaller deposits, California small claims court handles disputes up to $12,500 for most individuals, with no attorney required. For larger deposits, if both parties initialed the RPA’s arbitration clause, binding arbitration usually controls instead of court.
Delivery, Timing, and Fees
Once everyone has signed, deliver Form CC to the escrow officer following the notice provisions in your purchase agreement. Electronic signatures through DocuSign, Authentisign, or similar platforms are standard and accepted. Physical delivery to the other party’s broker also satisfies notice in most California transactions. The escrow company should confirm receipt within a couple of business days.
After receipt, escrow verifies signatures, confirms the disbursement instructions are clear, and processes the refund or distribution. The actual fund transfer typically takes three to five business days from confirmation, barring complications. The escrow company may deduct a cancellation fee — usually a few hundred dollars, depending on the company — from the deposit before paying out the rest.
Watch for Wire Fraud on the Refund
Wire fraud targeting real estate transactions has grown sharply, and the cancellation phase is just as exposed as the closing phase. If escrow is wiring your refund rather than mailing a check, verify the wiring instructions by calling the escrow officer at a number you already have on file. Never use a phone number from an email. Legitimate wire instructions almost never change mid-transaction; an email claiming the wire details have been “updated” should be treated as a red flag until you confirm by voice. Fraudsters rely on urgency, so slow down whenever someone pressures you to send or receive money fast under new instructions.
Asking for a check instead of a wire removes most of the fraud risk and adds only a few days to the timeline. Either way, confirm with your escrow officer directly before any money moves.