California BRBC Requirements Under AB 2992: The 90-Day Rule Explained

California Was First — And Has Lived With This Longer Than Anyone

While Texas and Florida agents scrambled to adjust in early 2026, California agents had already been operating under mandatory written buyer representation agreements since January 1, 2025. Assembly Bill 2992 went into effect a full year earlier than the federal MLS rules, making California the most experienced state in the country at navigating buyer agreement compliance.

That experience has produced something valuable: a clear body of enforcement decisions, broker guidance, and court rulings that reveal exactly where agents go wrong. The lessons from California's first year under AB 2992 are instructive for every agent in every state — but for California agents still working through the nuances of the law, the details matter enormously.

The most misunderstood provision in AB 2992 is not the agreement requirement itself. It is the 90-day maximum term rule — a provision unique to California that has rendered thousands of agreements legally worthless without agents realizing it.

What AB 2992 Requires

California Assembly Bill 2992 imposes three core obligations on real estate licensees working with buyers:

• Written Buyer Representation Before Touring. A signed Buyer Representation and Broker Compensation Agreement (BRBC) must be in hand before the agent tours any property with a buyer. Unlike some states, California gives a grace window — but it is narrow.
• The 3 Business Day Rule. If a buyer tours a property before signing a BRBC — for example, at an open house attended without a buyer's agent — the representing agent must obtain the signed agreement within 3 business days of that first tour. This is not a permanent grace window. Miss it and the agent is operating without a valid agreement.
• Written Compensation Disclosure. The agreement must specify, in writing, how the agent will be compensated — including the amount or formula, who is paying it, and whether the agent may accept compensation from the seller's side. This disclosure must be made before substantive services are rendered.

In practice, the cleanest compliance path is to obtain the signed BRBC before any property tour begins. The 3-day window exists to accommodate edge cases, not to normalize pre-agreement showings.

The 90-Day Maximum Term Rule — California's Unique Provision

This is where California diverges sharply from every other state in the country, and where agents face the most serious risk of unknowingly operating with a void agreement.

Under California Civil Code §1670.50 as amended by AB 2992: any Buyer Representation and Broker Compensation Agreement with a term exceeding 90 days is void and unenforceable.

Not voidable. Void. As in, it never existed as a matter of law.

Before AB 2992, California agents routinely executed BRBCs with terms of 180 days, 6 months, or even one year — matching the typical length of a home search. Every one of those agreements, if executed after January 1, 2025 with a term exceeding 90 days, is legally worthless. The agent has no enforceable compensation claim. The buyer can walk, and a court will not help the agent recover.

An agreement that runs 180 days is not a half-compliant agreement. It is a void agreement. There is no middle ground.

The practical consequence: California agents must track BRBC expiration dates actively. When a BRBC expires after 90 days and the buyer has not yet found a property, the agent must execute a new agreement before continuing to show properties. The new agreement starts the 90-day clock fresh.

Electronic renewal — a new DocuSign envelope or a platform-generated renewal — satisfies the requirement. What does not satisfy it is simply continuing to show properties and hoping the expired agreement covers the eventual transaction.

The Corporate Buyer Exemption

The 90-day maximum term rule applies to individual buyers purchasing personal residences. It does not apply universally.

Under AB 2992, entities purchasing commercial or investment property in a corporate capacity — LLCs, corporations, partnerships, trusts acting as investment vehicles — are exempt from the 90-day maximum. These agreements can run for any term the parties negotiate.

Two important caveats:

• An individual buying an investment property in their own name (not through an entity) is not exempt. The 90-day cap applies.
• An LLC with a single member who is also the beneficial owner purchasing a property intended as a personal residence is a gray area. CAR guidance recommends treating such buyers as individuals subject to the cap absent clear evidence of genuine business purpose.

When in doubt, use a 90-day term and renew. The cost of a renewal is negligible. The cost of a void agreement is the entire commission.

The Three California Agreement Types

BRBC Individual

The standard California Association of REALTORS form for individual buyers purchasing residential property. Maximum term: 90 days. Must be renewed in writing after expiration. This is the form used in the vast majority of California residential transactions.

The form includes all AB 2992-required compensation disclosures, the 90-day term field (which must be filled in — leaving it blank defaults to an unenforceable open-ended agreement), and the source neutrality clause required by the NAR settlement.

BRBC Corporate

For entity buyers — LLCs, corporations, partnerships, and qualifying trusts — purchasing commercial or investment property. No statutory maximum term. The parties negotiate the term as part of the agreement. This form requires additional documentation confirming the entity's existence (typically a certificate of good standing) before execution.

PSRA — Property Showing Representation Agreement

California's short-form agreement for single-property tours. Used when a buyer wants to see one specific property without entering into a full representation relationship. The PSRA creates a limited agency relationship for the duration of that specific showing only. It does not grant the agent the right to represent the buyer in any subsequent transaction, and it does not lock the buyer into exclusivity.

The PSRA is appropriate for open house walk-throughs where a buyer has asked an agent to accompany them without committing to full representation. It is not appropriate as a substitute for the BRBC in ongoing buyer relationships.

The 3 Business Day Rule in Practice

Monday tour at an open house. Tuesday is business day one. Wednesday is business day two. Thursday — by end of business — the signed BRBC must be executed.

Electronic signatures satisfy the requirement. The timestamp on the executed document is the controlling fact. If the buyer is unreachable or unwilling to sign by the deadline, the agent must stop providing representation services until the agreement is in place.

This creates a practical enforcement problem for open house agents: every buyer who engages in substantive conversation — asking about offer strategy, disclosure documents, or financing contingencies — may be triggering the 3-day clock. The safest posture is to have a PSRA available for signature at any open house where substantive representation may be provided.

The Three Mistakes California Agents Make Most Often

1. Running agreements past 90 days without renewal. This is the most common and most expensive mistake. Agents execute a BRBC in January, the buyer finds a property in April, and at closing the agent discovers the agreement expired in early April. The commission is unenforceable.

2. Not getting the BRBC signed before the showing. The 3-day grace window is not a license to show first and paperwork later as a routine practice. DRE enforcement has flagged agents who consistently rely on the grace window as evidence of willful non-compliance with the spirit of AB 2992.

3. Using BRBC Individual for corporate buyers. The forms are different, the legal consequences are different, and the 90-day cap does not apply to entities. Using the wrong form for a corporate buyer creates unnecessary term constraints on what could legally be a longer engagement.

California's year of experience under AB 2992 has produced one clear lesson: the agents who fare best are those who systemized compliance from day one. Automated agreement generation, expiration tracking, and digital renewal workflows eliminate the margin for error entirely.