A Notice to Perform in California real estate is a formal written demand, issued on a C.A.R. standard form, that gives the other party in a residential purchase agreement a short window to complete a missed contractual obligation or face cancellation of the deal. It is not a general complaint. It targets a specific deadline that has already passed, and it is the required first step before either buyer or seller can walk away.
Get the details right and it works exactly as designed. Get them wrong, or send it when you shouldn’t have, and it can cost you more than the delay you were trying to fix.
When You Can Send One
The notice only works when you can point to a specific obligation in the purchase agreement and a specific date that came and went. The triggers fall on both sides.
Buyer Missed a Deadline
Sellers most often reach for the notice when a buyer has failed to deliver proof of funds or financing within the negotiated window. That covers a pre-qualification letter, written verification of down payment funds, or loan commitment documentation. The other frequent trigger is failure to remove contingencies by the agreed date. Inspection, appraisal, and loan contingencies protect the buyer early in escrow, but leaving them open past their deadline locks the seller into a deal with no certainty of closing. A seller watching stronger offers pass by while a buyer sits on an expired contingency period has a solid reason to force the issue.
Seller Missed a Deadline
Buyers use the notice too. Common seller-side triggers include failing to deliver mandatory disclosures, the Preliminary Title Report, or Homeowner Association documents within the required timeframe. Even routine obligations like making the property available for inspections can support a notice if the seller stalls.
You Have to Be Clean Yourself
This is where most Notice to Perform disputes fall apart. California contract law requires the party issuing the notice to be ready, willing, and able to perform their own obligations. A seller who hasn’t delivered disclosures cannot credibly demand the buyer remove contingencies. A buyer who hasn’t deposited earnest money can’t demand HOA documents.
If you send a notice while you’re behind on your own commitments, the other side can challenge whatever cancellation follows. In mediation or arbitration, the first question is almost always whether the party who pulled the trigger was current on their end. Skipping that self-check is the single most common mistake with this form.
Filling Out and Delivering the Form
C.A.R. publishes two versions: Form NBP (Notice to Buyer to Perform) and Form NSP (Notice to Seller to Perform).1California Association of Realtors. C.A.R. List of Standard Forms Whoever fills out the form has to identify the exact paragraph of the purchase agreement and the specific obligation that was missed. Vague language will not hold up. The form needs a concrete reference, for example paragraph 14 for inspection contingencies or paragraph 3 for the initial deposit.
Once completed, the notice must be signed and dated by the party making the demand. Most agents deliver it by email to the other party’s designated agent, which produces an immediate receipt and a verifiable timestamp. The delivery method should match whatever the purchase agreement specifies for notices.
The default performance period under the standard C.A.R. contract is two full days after delivery.2California Association of Realtors. Quick Guide: How a Seller Can Cancel a Purchase Agreement The clock does not run on weekends or California state holidays. A notice delivered on Thursday afternoon typically gives the other party until the following Monday. Pull the current form version from professional software; using an outdated one can create problems if the dispute reaches mediation.
Notice to Perform vs. Demand to Close Escrow
These forms address different stages of the same problem, and confusing them is a costly error. A Notice to Perform (NBP or NSP) covers obligations that come due during escrow, like removing contingencies or delivering documents. A Demand to Close Escrow (DCE) is for the situation where the closing date itself has passed and the other party simply hasn’t shown up to finish the deal.
The response windows differ. A Notice to Perform gives two days. A Demand to Close Escrow allows three calendar days.2California Association of Realtors. Quick Guide: How a Seller Can Cancel a Purchase Agreement Using the wrong form for the situation can hand the other party grounds to argue the cancellation was procedurally defective.
Canceling After the Two Days Expire
When the window closes and the required action still hasn’t been taken, the performing party gains the right to cancel. Cancellation is not automatic. You have to affirmatively deliver C.A.R. Form CC (Cancellation of Contract), which tells the escrow company the deal is dead and the file should be closed. Skipping that step and walking away leaves the contract technically alive, which can create liability.
Deliver the cancellation according to the notice procedures in the original purchase agreement. Timing matters. If you wait too long after the performance period expires, or if you take actions inconsistent with cancellation like continuing to negotiate, you can waive your right to cancel.
What Happens to the Earnest Money Deposit
Once a cancellation is on the table, the fight usually shifts to the earnest money sitting in escrow. The escrow company cannot release those funds to either side without signed mutual release instructions from both parties. If the buyer failed to perform and the seller cancels, the seller may claim the deposit as liquidated damages.
The C.A.R. standard Residential Purchase Agreement defaults to a liquidated damages amount of 3% of the purchase price. California law allows liquidated damages provisions of up to 10% of the purchase price, and any amount at or below that threshold is presumed valid unless the buyer proves it was unreasonable.3LegiScan. California 2025 AB1406 Amended – Civil Code 1675 The 3% figure comes from the form, not the statute. Parties can negotiate a different amount within the 10% ceiling.
When one side refuses to sign the mutual release, the funds sit frozen until a court order or arbitration award resolves it. California Civil Code Section 1057.3 adds pressure: if a party refuses to sign the release within 30 days of a written demand and lacks a good-faith basis for withholding, they can face treble damages capped between $100 and $1,000, plus the other side’s attorney’s fees.4Justia. California Civil Code 1052-1059 The penalty amount is modest. The attorney’s fees exposure is what tends to move people. A genuine dispute over who deserves the money is a valid defense. Refusing to sign as leverage is not.
When You Want the Property, Not the Cancellation
Cancellation and liquidated damages are the standard remedies, but a buyer who wants one specific property can pursue specific performance instead. That is a court order forcing the seller to complete the sale. California courts treat real estate as inherently unique, so this remedy is more available than it would be for most other contracts.
A buyer pursuing it has to show a valid contract, substantial performance of their own obligations, readiness and ability to close, and that money damages would be inadequate. The seller’s breach has to be clear, and the contract terms have to be definite enough for a court to enforce. It is a litigation path, and it requires the buyer to have been in full compliance throughout. A buyer who missed their own deadlines and then sues for specific performance is in for a rough time.
Sellers rarely go this route. Courts almost never force a buyer to purchase a property, because the seller’s loss is nearly always quantifiable in dollars, which is why retaining the liquidated damages is the standard seller remedy.