Realtors, buyers, and sellers now need to consider the use of such provisions within these contracts. In the case of unproven water supply from either an existing or a new source, the buyer will be concerned not only with quality but also with quantity. If a licensee is acting in these circumstances and has searched the title, it would be prudent for the licensee to draw to the seller’s attention the existence of encumbrances which need to be cleared from title. If the Canada Revenue Agency disallows all or any part of the rebate claimed, the Buyer will immediately, upon receiving a written demand from the Seller, reimburse such disallowed amount to the Seller together with any interest and penalties that the Seller is required to pay under the Excise Act as a result of such disallowance. Under some home warranty programs, current or subsequent owners may be impacted by exclusions from warranty coverage that are permitted by the Homeowner Protection Act and thus could void warranty insurance. When a homeowner assigns to the buyer of the home, the tenancy agreement continues on the same terms, including the rent, as existed before the assignment. If a property owner takes a car as partial proceeds, the question of responsibility for the tax, transfer costs, etc., must be clearly identified between the parties. Licensees should be aware that there are several factors which affect fire insurance coverage on dwellings which contain a wood burning appliance. Sometimes, the warranty is not transferable and the next owner does not qualify. Sets licensing standards . If the seller has a copy of the sublease, the buyer’s agent should obtain a copy and advise the buyer to read the sublease, or obtain legal advice, to ensure that the sublease can be assigned to the buyer. With Bridgewell’s buyer systems and plans we’re determined to find the right home for you efficiently & effectively all while providing you the guidance and education that you need. City of Port Coquitlam in the amount of $ (amount). This is to review the history of the home that you are purchasing. Subject to a new second mortgage being made available to the Buyer on or before (date), in the amount of $ (amount) at an interest rate not to exceed ___ % per annum calculated (select either half-yearly or monthly), not in advance, with a ___–year amortization period, ___–year term and repayable in blended payments of approximately $(amount) per month including principal and interest (plus 1/12 of the annual taxes, if required by the mortgagee). Excerpt from Trading Services | Section 2. The buyer does not have to pay the seller any additional money if they make money from selling the contract. It is not uncommon, for example, for duplex owners to deny that they are part of a strata corporation and thus fail to hold general meetings, approve budgets and maintain operating and contingency reserve funds. As a result, written disclosure of a material latent defect is required regardless of whether the real estate is offered for sale or for rent or lease. Chen v. Hsu, S.C.B.C., Reasons for Judgment, February 29, 1997, (Cited with the kind permission of Gerry Neely, B.A., LL.B., Pearlman & Lindholm, Victoria, B.C.). Please keep in mind that many documents have been lost/destroyed through the years, so the lack of information at the health unit may not necessarily mean that a permit was not taken. The buyer inspector then usually finds problems and the buyer wants the seller to correct them in order to go through with the deal. The results of the test indicated that no (describe condition) was present (select either in or on) the (select either building or property) . We’ve had subjects before that are subject to having an asbestos test, or subject to receiving all of the names and phone numbers of contractors that renovated the property. The Seller covenants to maintain the underlying mortgage in good standing and to pay and satisfy in full when due or when the Agreement for Sale is paid off, and on any failure to do so, the Buyer may pay the underlying mortgage directly, and deduct such payment from amounts owing to the Seller under the Agreement for Sale. Common property: the lesser of $100,000 X the number of dwelling units in the building or $2.5 million per building. When proposing agreements for sale, licensees should keep in mind the particular requirements of the seller and the buyer. Some sample clauses are shown below. Subject to the Buyer’s(select either lawyer or accountant) approving the form of the documentation on or before (date) . Subject to the Seller approving the Buyer’s credit report on or before (date). If the title contains non-financial charges which are not caught by the exceptions in the standard contract, the licensee must ‘‘otherwise set out’’ those charges in the agreement. Sign up for our newsletter to get tips, stats and market updates sent to your email! The Buyer accepts the System, in its present condition, “as is, where is.”. Therefore, the (number of hours) hours will expire at (time) o’clock (select either a.m. or p.m.) on (date). failed to advise the sellers to obtain independent legal advice before entering into the Contract of Purchase and Sale. The 72-Hour Clause Also called a release clause, the 72-hour clause is typically written into sales contracts by the seller. Ώ NOTE: The Seller cannot give notice to the tenant until all the subject clauses have been removed. The Disclosure Notice will state that the home was built under an Owner-Builder Authorization, when the 10-year period started, and whether or not there is a voluntary policy of home warranty insurance in place for the home. A Disclosure Statement must be filed with the Superintendent of Real Estate before a developer or a developer’s agent can market one cooperative interest if the cooperative interest is part of a development consisting of two or more cooperative interests. Standard Real Estate Contract Subjects (i.e. [December 2018: The following section was added to the Professional Standards Manual]. b) Provincial Requirements for Licensees Relating to Real Estate Contract Assignments On May 16, 2016, requirements relating to the assignment of real estate contracts came into force in BC. This document constitutes written notice from the Seller to the Buyer requiring the removal of (select either all conditions or the condition) from this contract within (number of hours) hours* not including Sunday or Statutory Holidays, or this contract will terminate at the end of the (number of hours)-hour period and the deposit will be returned to the Buyer. With that knowledge the end price negotiated will reflect how the parties have valued the possibility and uncertainty of future recovery and related expenses, knowing that if there is a recovery, any funds disbursed will be payable to the registered owner at the time of disbursement. The purpose of an “as is” clause is to force the buyer to rely upon its own investigation, rather … Subject to the Buyer reviewing and approving the site profile on or before (date) . (c) a statement containing a list of fixtures, goods, chattels, rights and other assets relating to or connected with the business that are not included in this transaction, on or before (date). You may have noticed surprisingly cheap properties in the West End, Fraserview and near Granville Island. Sometimes, a utility with a registered charge against the seller’s title may assign an interest in the utility’s charge as security for the payment of a loan or the performance of some other financial obligation payable by the utility. Licensees should be aware that, in some instances, sellers may find themselves unable to clear title as their financial obligations are greater than they expected and exceed the proceeds of the sale. As evidence of the (select either removal or remedy) , the Seller attaches the following documents: The Seller discloses that the (select either building or property) did have (describe condition) but has undergone the following corrective measures: The Buyer accepts the condition of the (select either building or property) in reliance on these corrective measures. Developers may therefore be required to update the Disclosure Statement to ensure that it is current before each new leasehold interest is marketed. A copy of the head lease with each page initialed by the Buyer as having been read and approved will be required by the Seller. Subject to approval of the (select either purchase or sale) by (name) on or before (date) . (6) Sale Price Insufficient To Cover Financial Encumbrances. City of Burnaby, Property Transfer Tax Calculator BC 2020: PTT Tax & Exemption Information, Everything You Need to Know About Subject Clauses & Subject Removal. Older versions of the standard Contract do not contain this wording and it must be added. In such cases, in order for disclosure to be effective, the licensee must provide the disclosure to the prospective buyer or tenant and allow the prospective buyer or tenant to determine whether they wish to withdraw their offer. The inspection report can come out saying it’s in the top 1% of all buildings in Vancouver, but the buyer still has the right to kill the deal if they’re still not satisfied even with that. All work on onsite systems, such as repairs to systems, and any maintenance on systems, must be performed by an authorized person. Many buyers do not know the proper questions to ask of the sellers or the buyer’s agent to make an informed decision to purchase a rural property. No further action is required by the buyer to ensure that the buyer will have the use of the parking stall/storage locker. It is also the buyer who is entitled to the New Housing Rebate, which the buyer can claim directly from Canada Revenue Agency or assign to the seller, who can claim it from Canada Revenue Agency. The Seller discloses, and the Buyer acknowledges, that the (select either building or property) contains (describe condition) and the Buyer accepts the (select either building or property) in this condition. Determine whether your buyer had any prior experience with wells. when a licensee is assisting an associate in the acquisition or disposition of real estate. The goal of the these requirements is to ensure that before they enter into a contract for the purchase and sale of their property, the seller understands and accepts the terms and conditions that will govern any assignment of the contract by the buyer, regardless of whether: When you are advising the seller on whether or not to insist that an offer include the Standard Assignment Terms (or other terms and conditions relating to the assignment of the contract), you should carefully consider and discuss with the seller what may be in their best interests. If the Buyer does not approve of any of this information, they can walk away from the (ie kill the deal) deal during this 7 day period. With respect to the Contract of Purchase and Sale dated(Contract) in respect of the Property, the Seller and Buyer agree that(Licensee), is not required to deliver monies received from the Buyer or Seller pursuant to the Contract to the Brokerage pursuant to section 27(1) of the Real Estate Services Act nor is the Brokerage required to deposit those monies in its brokerage trust account pursuant to section 27(2) of the Real Estate Services Act. Although the BCREA Property Disclosure Statement addresses the issue, it does not, in itself, provide sufficient evidence that the property is insured, or is insurable. However, the Seller may, (select either “at any time” or “upon receipt of another acceptable offer”) deliver a written notice to the Buyer* or to (name of his or her representing real estate company) requiring the Buyer to remove all conditions from the contract within (number) hours** of the delivery of the notice, not to include Sundays and Statutory Holidays. In instances where a “stream”, as defined above is present, licensees drafting contracts of purchase and sale should incorporate the following clause: Subject to the Buyer receiving and approving independent professional advice concerning any limitations on the use and/or development of the property resulting from the Riparian Areas Protection Act, on or before (date) . Do not make representations to your client about the sufficiency of the water supply. The price includes GST payable by the Seller and net of any applicable Rebate. (v) Home Warranty Insurance on Resale Homes. RECBC recommends the following clause where buyers and sellers wish to enter into such an agreement: The Buyer and Seller agree that the terms and conditions of any offer or counter-offer with respect to the property located at(address) shall not be disclosed to any other potential Buyer of the property without the prior written consent of the Buyer and Seller. a plan of the system including an As-Built Drawing; and, for a wastewater treatment system installed prior to May 2005, the appropriate permit has been issued and the system was installed with the approval and inspection of the appropriate department of the B.C. The separate written agreement required by section 27(4) of RESA should contain the following components: Agreement Under Section 27(4) of the Real Estate Services Act (where money is to be held by a holding brokerage). Other Requirements Where the Deposit Will be Held by Someone Other Than a Licensed Brokerage. This ultimately sets the stage for a smooth completion without surprises. At the time of listing a property, it is a prudent practice for licensees to discuss with a seller their obligation to clear title and the nature of the expenses they will face at closing. It requires that the seller and buyer enter into a separate written agreement which essentially relieves the licensee and the related brokerage of their obligation to deposit the money into the brokerage’s trust account. These requirements apply in all transactions where a licensee is acting for the seller and/or the prospective buyer of real estate (except where the contract is for the sale of a development unit by a developer, as those terms are defined in section 1 of the Real Estate Development Marketing Act  — will open in a new tab). Subject to the Buyer on or before (date) obtaining and approving a Property Disclosure Statement with respect to the information that reasonably may adversely affect the use or value of the property. When in doubt on any question, licensees are advised to seek the advice of their managing broker and, if necessary, a lawyer. serve one or more parcels on strata lots or on a shared interest of land. Subject to the Buyer, at the Buyer’s expense, obtaining final approval of zoning change from (current zoning) to (desired zoning) on or before (date) . Further, the Local Government Act  — will open in a new tab gives municipalities and regional districts the power to pass bylaws to withhold the issuance of building permits if they would result in an alteration to protected heritage property. Once an onsite system is installed, upgraded or repaired, it is the homeowner’s responsibility to ensure that the maintenance plan is followed. This offer is conditional on the Seller and Buyer and their respective advisers establishing an agreed method for the purpose of valuing the inventory/stock. Licensees will find it helpful to colleagues to leave copies of the disclosure statement available for review when the property is being shown. Clause 20A of the standard real estate contract in use in BC now prohibits the buyer from assigning the contract of purchase to a third party without the seller’s written consent. Allow for appropriate time line to book an inspection and to gather all the required paperwork. The typical deficiency provision will require that representatives of both the buyer and the seller (builder) jointly conduct a walk-through of the property prior to possession in order to identify any work that requires correction. In some cases, the permission to use the parking stall/storage locker may have been given many years ago. Therefore, if information on the warranty insurance is not provided to a subsequent buyer, it does not mean that a claim cannot be made on the policy. It is important to remember that, the use of parking stalls or storage lockers by the seller does not necessarily mean that they will be available for the purchaser. Provide the form to the seller’s licensee at the same time the offer is presented. Arguments could be made that contracts containing such phrases in the description of the buyer are unenforceable due to uncertainty in the identity of the buyer. However, notwithstanding general non-compliance by the strata corporation with the legislative requirements, a buyer’s agent should obtain a copy of the strata plan and related schedules (if any) from the land title office and the agent should insist on obtaining a copy of the strata corporation insurance documents. Other more common ones that we see for residential deals are: Conditional on lawyer’s review Licensees should check with their managing broker as to the minimum amount and time frame which their company requires in order to pay interest. In this case, the following clause should be used in the contract: Deposit to be payable within(number of hours) hours of acceptance of this offer. From the buyer’s perspective, the subject removal period should be as short as possible. It is a fundamental term of this contract that the Seller must have finished all work, and delivered to the Buyer on or before the Completion Date, an unconditional Municipal/City/Regional District Occupancy Certificate or other evidence satisfactory to the Buyer that construction is finished. If the buyer advises the brokerage that he or she has stopped payment or intends to stop payment on the deposit cheque before it has been deposited, the brokerage should advise the buyer that it is obligated under RESA to deposit the cheque as soon as possible. However, a life estate is a freehold interest in land whereas a life lease is a leasehold interest in land that creates a landlord and tenant relationship. Unless it is clear that the parking stall/storage locker will be available to be used by the purchaser, the parking stall /storage locker should not be included on the listing. The Disclosure of Interest in Trade Form is not required to be submitted to RECBC; however, a copy must be retained by the brokerage. Often, these charges are payable as rent. the following clause be included in the Contract: the seller make a written disclosure to the buyer in a form separate from the Contract of Purchase and Sale; and. On the face of it, the intent is usually that a back-up contract will become firm and binding if the buyer under the previously accepted contract does not remove the subject to clauses by the date agreed to in the previous contract. Has the seller experienced any problems with the water supply, on a seasonal or other basis? It will not provide any information as to the terms and conditions of those charges. Within 30 days of completing the installation of the system, the authorized person must file the following documents with the local health authority, and provide copies of all documents to the owner: Where a new use will be made of an existing onsite wastewater treatment system previously permitted under the 1985 Wastewater Treatment Regulation (for example, a house being built to replace a temporary or seasonal dwelling), an authorized person should conduct a site evaluation and a documented inspection of the system to determine if it is suitable for the new use. Licensees who act for buyers should caution their clients that questions on the PDS worded ‘‘Are you aware…’’ refer only to the present tense. This includes your duties to act in the best interests of the client and in accordance with the client’s lawful instructions, and to advise the client to seek independent professional advice on matters outside of your expertise. To demonstrate, Randy Ready is licensed with ABC Randy Realty, which has entered into an agreement with ABC Big Realty to provide trust accounting services for ABC Randy Realty. The Seller will give legal notice to the Tenant to vacate the premises, but only if the Seller receives the appropriate written request from the Buyer to give such notice in accordance with the requirements of section 49 of the Residential Tenancy Act. Most real estate agreements are conditional on the buyer being satisfied with a home inspection. about the seller’s entitlement under the contract to any profit resulting from an assignment of the contract, if applicable. If the strata corporation does not have a bylaw that limits the types of business or their activities that operate in the non-residential strata lots, a buyer’s agent should point this out to the buyer. Buyer has approved the Rules and Regulations, the Memorandum and Articles of Association, any lease documentation and any financial obligations of (name of co-operative association) including the following specific restriction(s): Ώ Warning re Approval of buyer by Directors: The Board of Directors of a Cooperative is allowed to make a decision as to the suitability of any buyer. Buyers can’t remove this subject clause during the … Not providing a disclosure notice is an offence under the legislation and, thanks to stronger compliance tools now available to the Licensing and Consumer Services branch of BC Housing, the requirement to provide the disclosure notice will receive increased attention. It is important to realize that the title search will reveal only those charges that are on title. Net lease b) the following clause be included in the Contract: Illegal Growth of Substances, or Growth or Manufacture of Illegal Substances Clause (for use with strata lots), (xxv) Health and Environmental Concerns — View Subsection, (7) Safety, Health and Environmental Disclosure Clauses. Where the form is used in relation to the disposition of real estate, the form only requires that the licensee indicates whether the licensee or licensee’s associate is the owner or tenant of the real estate. By far, there are two most common contract clauses for real estate in an offer to purchase a property. The repayment term is basically peculiar to life leases. The following clauses are designed to assist licensees in obtaining important financial and other information from the seller: If the financial statements are not available, a licensee should advise the buyer to obtain professional advice from an accountant. It is not necessary to list the parking stall/storage locker separately. In such cases, buyer’s agents should recommend that buyers obtain legal advice before becoming committed to buy and may wish to include the following clause making the contract subject to obtaining legal advice. For example: As a licensee, you have an obligation to discuss everything material to the transaction with your client, including the subject of assignments. For example, disclosing the material latent defect on the Property Disclosure Statement (PDS) may now satisfy the requirements of the Rules. who made the following comments about the PDS: I have no idea who drafted those questions but they are clearly drawn in a manner offering more protection to a vendor than to a purchaser and in a manner to provide a sales person or vendor with an air of rectitude which might not on all occasions be deserved even given the cautionary line: ‘‘buyers are urged to carefully inspect the property and, if desired, to have the property inspected by an inspection service of their choice’’. 24 Hour Clause (Buyer Side) Clause … Licensees must be aware of the problem associated with inventory. The particular portion may be an apartment or a recreational vehicle site. The amounts of these sorts of financial obligations can be very substantial and, when combined with commissions payable, may create a circumstance where the seller has no practical remedy and the transaction collapses, leaving the buyer, the seller and the licensees involved all in regrettable positions with potential legal implications. Whether it’s presale or resale, investment or to live in, we’ve got you covered. The instruction here does not apply to any other generic disclosure statements produced elsewhere. Licensees should leave the calculation of the exact amounts to the notary/lawyer acting as conveyancer ( just as the notary/lawyer calculates tax and utility adjustments, not the licensee). Provision for future escalation in rents or lease payments between the landowner and lessee may come as a surprise to inadequately informed tenants. This can simplify the disclosure to buyers and alleviate concerns. The following clause can be used: Purchase price(select either includes or does not include) (select either inventory or stock) . Timing of the disclosure is critical. Sometimes, the seller and buyer agree that a deposit will be payable on acceptance or within a stated time period. The following characteristics of many life leases should also be considered. The insurer may then accept, surcharge or refuse the application. Excerpt from Trading Services | Section 2. The Consent Order entered into between RECBC and the licensee provided that the licensee. The buyers apparently removed the subject to inspection clause without getting an inspection. Version: bc4f44f4, Update on Safe Real Estate Services During COVID-19. In this scenario, the deposit cheque should be made payable to ‘‘Joe Smith, In Trust.’’ No separate written agreement is necessary if the licensee is only to deliver the deposit cheque to the lawyer.