There is a link in the wording between RESA and the Real Estate Development Marketing Act with respect to the treatment of deposits. Some market areas and/or agents have developed a contract addendum that specifies additional terms to be included in all Contracts of Purchase and Sale. Section 18(1) — will open in a new tab of the Real Estate Development Marketing Act states that: ‘‘A developer who receives a deposit from a purchaser in relation to a development unit must promptly place the deposit with a brokerage, lawyer, notary public or prescribed person who must hold the deposit as a trustee in a trust account in a savings institution in British Columbia.’’. In some cases, it may be necessary to include in the Contract of Purchase and Sale, a subject clause which permits the buyer to sell their own property. If the buyer does intend to alter the use, the following clause should be incorporated into the Contract of Purchase and Sale: Subject to the Buyer satisfying himself/herself on or before(date) regarding the potential effect of the Heritage Conservation Act on the use and/or development of the property. (parking, storage, etc.) 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. Where a special levy will likely be approved after the completion date or the licensee is uncertain whether the special levy will be considered for approval before or after the completion date, the licensee should use the following holdback clause: A portion of the purchase price in the amount of $____, (the “Holdback”) will be held by the lawyer or notary public acting for the Buyer in an interest bearing account until ____, 20__ (the “End Date”). Such an addendum might include a clause such as the one that follows, when the buyer is to have the property inspected. Randy Ready of ABC Realty, the buyer’s agent who is drafting the contract on behalf of the buyer, has agreed to deliver the deposit to Joe Smith. If the chattel is valuable and saleable, why not consider a clause that allows the buyer to sell the item in question? A life lease in its broadest sense is a leasehold interest in land, the term of which extends for the life of the lessee. The water needs for each family may be significantly different as a result of the number and age of people living in the house, laundry washed, cattle or horses to water, etc. A licensee acting for the seller must ensure that the written disclosure of the material latent defect was provided to the buyer prior to the acceptance of the offer by the seller. Excerpt from Trading Services | Section 5. However, the Superintendent is of the view that the Real Estate Development Marketing Act is not applicable to the sale or lease of development units on First Nations property and a developer is not required to file a Disclosure Statement or comply with any other requirements contained in the Real Estate Development Marketing Act when a development is located on First Nations property. The principal balance may be paid at any time, in whole or in part, upon payment of an additional (number of months) months’ interest as a penalty and by way of compensation for said prepayment. WARNING: If licensees are not using the standard Contract of Purchase and Sale developed by the BCREA, they should check the contract to ensure that this wording is present. Other Requirements Where the Deposit Will be Held by Someone Other Than a Licensed Brokerage. Licensees should also keep in mind that the disclosure must be made before an agreement for the acquisition or disposition of the real estate is entered into. An associate of a brokerage can be a company in which a director of the brokerage is entitled to not less than 5% of the profits. There are brochures and GST memoranda available at Canada Revenue Agency offices that licensees may find useful regarding current rebate limits and exemptions, including the GST New Housing Rebate brochure RC4028(E). If the system is to be inspected, a clause such as the following should be included in the Contract of Purchase and Sale: Subject to the Buyer, at the Buyer’s expense, receiving, reviewing and being satisfied with a report from an appropriate authorized person (as defined in the British Columbia Sewerage System Regulation (‘‘Regulation’’)) concerning the operational function and condition of the components of the wastewater treatment system on the property (‘‘System’’), and compliance of the System with the Regulation on or before (date) . One other issue was that licensees had not advised their clients to seek legal advice where the deposit was not to be held by a brokerage under RESA. The Seller represents and warrants that the Seller is duly licensed pursuant to the Homeowner Protection Act and that the mandatory warranty insurance pursuant to that Act is in place. In BC, many homes outside major urban areas don’t have access to a public sewer system. As a result, some strata corporations will comply diligently with the governance requirements, while others will consider the legislation as a noncompulsory guide and others, particularly smaller strata corporations, may ignore the legislative requirements completely. For more information about riparian areas visit: www.env.gov.bc.ca/habitat/fish_protection_act/riparian/riparian_areas.html — will open in a new tab, www.livingbywater.ca — will open in a new tab, www.stewardshipcentre.bc.ca — will open in a new tab, Excerpt from Trading Services | Section10. Give us a call 604-765-0376 or text 604-319-0200. Additionally, licensees should determine whether insurance or warranty claims have been filed. In some cases, the offering of a real estate development unit may constitute the offering of an investment contract, which is a security within the meaning of the Securities Act. The circumstances for invocation will depend on how the time clause was written in the first offer, with either ‘‘at any time’’ or ‘‘upon receipt of another acceptable offer’’ being the reference to allow invocation. The approved lender is responsible for obtaining the required certificates prior to advancing funds. This would include, but would not be restricted to, issues such as private easements for shared driveways and private roads encroaching on a neighbour’s land through a friendly agreement which may not pass with the title. (b) the Contract of Purchase and Sale may provide for a small initial deposit payable within a specified period of time after the acceptance of an offer, which is to be increased to a specified amount upon removal of conditions precedent. The Seller discloses, and the Buyer acknowledges, that the (select either building or property) (select either contains or has contained) (type of insulation) and the Buyer accepts the (select either building or property) in this condition. Is the strata council managing their budget well? The licensee must disclose the amount of the first mortgage when writing subject clauses regarding seller-take-back mortgages. All rights reserved. (2) The objects of the real estate council are to The Seller will provide to the Buyer on or before (date) all details of the warranty insurance coverage pursuant to the Homeowner Protection Act. The Deficiency List, which will form part of the contract will identify the deficiencies and include a mutually agreed upon value for each of the deficiencies to be remedied. Does the seller have a well report that verifies his or her information? In such cases, both the Real Estate Development Marketing Act and the Securities Act apply. Sale Of A Business. Seller will deliver leasehold interest free and clear of all financial encumbrances. As licensees are aware, the wording in the Contract of Purchase and Sale states ‘‘Deposits to be held in trust in accordance with the provisions of the Real Estate Services Act’’. The insurer may then accept, surcharge or refuse the application. Strata plans may be filed to create multi-unit developments ranging in size from two to hundreds of units. 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. Does it test at the levels necessary to satisfy the buyer’s needs? The price includes GST payable by the Seller and net of any applicable Rebate. The current insurance cover note explaining the strata corporation’s insurance coverage and deductibles. Similar to clauses that permit the buyer to sell its property, a clause can be used that permits the buyer time to sell the chattel. A “stream” in the province of BC is broadly defined in the RAR to include the following that provides fish habitat: Riparian vegetation and streams are protected by the Federal Fisheries Act; the Provincial Riparian Areas Protection Act, and the Water Act. A subject free offer is an offer that does not have any subject clauses. The Seller will co-operate with the Buyer in the zoning application process. It is not necessary to list the parking stall/storage locker separately. The method for valuing the inventory should be referred to the parties’ advisers and a valuation date agreed upon by the parties prior to entering into the Contract of Purchase and Sale. If a buyer requires financing, the lender may require the buyer to obtain a priority agreement signed by the landlord, allowing the lender to register a security interest and to acknowledge that the park owner has no financial interest in the manufactured home. This documentation can take one of several forms. It is important to ensure that the clients have confirmation in writing from either the mortgagee or the mortgagee’s lawyer. Not being aware of the expiry dates could result in missing the opportunity to submit a claim under the policy. When it comes to buying a home, safety comes first! Licensees should recognize that under section 28 of the Manufactured Home Park Tenancy Act, a seller and buyer of a manufactured home in a manufactured home park must obtain the consent of the landlord to sublease the pad from the former tenant (the seller). The buyer can transfer the contract for any price, even for a higher price than they paid for the property. It is also to make yourself aware of any charges that may be on title, such as a restrictive covenant or easement that you will have to uphold. If, however, the strata lot has been used to grow cannabis or manufacture illegal substances, and the buyer is prepared to accept the condition of the property on an “as is” basis, RECBC recommends that: The Buyer acknowledges that the strata lot or limited common property associated with the strata lot has been used for the illegal growth of any substances, or growth or manufacture of illegal substances, and acknowledges that the Seller makes no representations and/or warranties with respect to the state of repair of the strata lot or the limited common property associated with the strata lot. (vii) Buyer has Reviewed the Documentation. Any physical encumbrance noted on the title should be described in adequate detail on the Contract of Purchase and Sale, notwithstanding the boilerplate of the Contract of Purchase and Sale. the assignor has the right to assign and the assignee has the right to receive a valid assignment by referring to the original contract; a proper assignment is drafted and validly executed (BCREA has created two forms entitled ‘‘Assignment of Contract of Purchase and Sale — New Development’’ and ‘‘Assignment of Contract of Purchase and Sale — Non-Development’’, both available on Webforms); the assignor is aware of their obligation to provide the seller with notice in writing of the assignment (unless the clause in the Assignment Option Clause has been used); the identities of the parties are clear and verified (e.g., proper photo identification, passport, etc., especially when the assignment involves parties with whom the seller may not be familiar); licensees acting for assignors should be particularly careful to establish the identity of the assignor. The Strata Property Act requires every strata corporation to maintain property insurance on the buildings on a strata plan and to maintain liability insurance. Excerpt from Trading Services | Section 8. This can be accomplished by using the following sample wording in a covering letter to the conveyancer: disclosure when a licensee is disposing of real estate and. Therefore, once this agreement is in place, the brokerage can then only return the deposit to one of the parties to the transaction by express agreement between the parties. Frequently, sellers believe they are covered when they are not and they could innocently misrepresent the situation to an unsuspecting buyer. It is financed like a cooperative, although sometimes private leaseholders will allow for less down payment and provide financing directly themselves. Because the allocation of the use of common property is within the control of the Strata Council and can change, when listing a strata lot where the parking stall/storage locker is common property, the seller should not promise a buyer that the buyer will be entitled to use any of the common property. If there is a dispute as to any particular deficiency, the contract should provide for a neutral third party to determine the extent of the deficiencies (typically an architect or engineer), the cost of repairing the deficiencies and whether or not they are satisfactorily completed. Some of the operational requirements are that every strata corporation must have bylaws, it must hold annual general meetings and keep minutes of the meetings, it must retain records relating to the strata corporation, the owners must approve a budget annually and the strata corporation must maintain operating and contingency reserve funds. A copy of the registered strata plan, any amendments to the strata plan, and any resolutions dealing with changes to common property. The Seller will provide irrevocable instructions to Mr. Smith to hold the Deposit in trust in accordance with the provisions of the Real Estate Services Act.’’. They may wonder if they should to using a 48 hour clause saying that they accept the offer but can give the buyers notice to remove their conditions within 48 hours of receiving notice to do so or else their offer will be terminated and the … A time share interest is defined in the Real Estate Development Marketing Act as a person’s interest in a time share plan. If the Buyer disposes of or agrees to dispose of the property, the full amount then owing under the Agreement for Sale shall immediately become due and payable at the option of the Seller, and any penalty payable because of the resulting prepayment of the underlying mortgage will be paid by the Buyer. On the first business day after the End Date the lawyer or notary public acting for the Buyer will pay any remaining balance of the Holdback plus accrued interest to the Seller. By the time the recovery is realized, the owner who paid the special levy to repair the building or fund the litigation may no longer be the registered owner. The following sample clause could be included in a Contract of Purchase and Sale in such circumstances. Should there be one Contract of Purchase and Sale or more? A convenient way to otherwise set out charges in the contract is to attach a current title search printout to the agreement and use the following clause: The Buyer acknowledges and accepts that on Completion the Buyer will receive title containing, in addition to any encumbrance referred to in Clause 9 (TITLE) of this contract, any non-financial charge set out in the copy of the title search results that is attached to and forms part of this contract. Subject to the Seller’s lawyer approving the financing terms and conditions on or before (date). 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. Subject to the Buyer, on or before (date) * receiving and approving the following documents with respect to information that reasonably may adversely affect the use or value of the strata lot, including any bylaw, item of repair or maintenance, special levy, judgment or other liability, whether actual or potential: A Form ‘‘B’’ Information Certificate from the strata corporation, attaching the strata corporation’s rules, current budget, the developer’s Rental Disclosure Statement (if any), and the most recent depreciation report obtained by the strata corporation (if any); If relevant, a Form ‘‘B’’ Information Certificate from the section, attaching the section’s rules, current budget, the developer’s Rental Disclosure Statement (if any), and the most recent depreciation report obtained by the strata corporation (if any); a copy of the registered strata plan, any amendments to the strata plan, and any resolutions dealing with changes to common property; the current bylaws and financial statements of the strata corporation, and any section to which the strata corporation lot belongs; the minutes of any meeting held between the period from (date) to (date) ** by the strata council, and by the members in annual or special general meetings, and by the members or the executive of any section to which the strata lot belongs; and. It is important to seek the guidance of those experienced in evaluating inventory. This condition is for the sole benefit of the Seller. Many of these properties are either Leasehold or Co-op, which doesn’t offer […] Sale of a Business. (1) Disclosing Defects: How the Law Works. The Buyer hereby consents to the Seller obtaining a credit report on the Buyer. The SPEA is delineated by a QEP as part of RAR to protect fish habitat from land alteration including consideration of sediment and erosion control; damage or alteration of vegetation, and trails and landscaping. Subject to the Seller and Buyer entering into a tenancy agreement on or before (date) for the Seller to occupy the premises as a tenant until (date) . If you have a client that you think may need to get out of the contract for no real reason this may be useful. The listing licensee should counsel the seller to seek legal advice because renegotiations may result in activating the back-up contract. 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. Licensees should be cautious about drafting clauses in these circumstances, given the uncertainty of future events and the difficulty in identifying issues that may or may not be readily apparent or foreseeable. Two members of the family showered in the morning and the other members showered in the evening. Under the Homeowner Protection Act, new homes that are under construction but not complete may not be sold (or offered for sale) unless the home is covered by home warranty insurance or exempt. Owners do not have title to the unit itself. The following wording has been added to the first page of the Contract of Purchase and Sale: If the Buyer fails to pay the deposit money as required by this contract, the Seller may, at the Seller’s option, terminate this contract. Licensees should also be aware that home warranty insurance may be void if it is found that illegal activity has occurred in the premises. Secure any representations by the seller concerning the well in writing so as to eliminate any doubt at a later time as to what was said. These sites are more likely to be clustered around existing urban areas, major rivers or other waterways, and other areas that are most attractive for human habitation. The effect of this wording is to allow the brokerage that holds a deposit in trust as a stakeholder to for ward these funds to the conveyancer, without having to obtain a separate written release from both the seller and the buyer. Its website (www.for.gov.bc.ca/archaeology/index.htm — will open in a new tab) contains a broad range of information on the Heritage Conservation Act and its application, including a Data Request Form for requesting information about specific sites. Agreements for sale may still be advantageous in certain circumstances, for example, where the seller has an existing mortgage at an interest rate which is lower than current market rate. The listing should indicate that the area in question is common property and that the seller has a sublease to a specific parking stall/storage locker. The exclusion reads as follows: “This indemnity plan does not apply to: 9. a claim relating to or arising from providing real estate services in a transaction where the Insured or the Insured’s spouse, or a firm or corporation more than 10% owned separately or in combination by the Insured and the Insured’s spouse, has or may acquire an ownership interest;”. The attached Property Disclosure Statement dated (date) is incorporated into and forms part of this contract. General Information. The same obligations apply to you if you are acting on your own behalf or on behalf of an associate as a buyer (directly or indirectly) in a real estate transaction. Excerpt from Trading Services | Section 6. Small strata corporations tend to be less familiar with the requirements of the legislation, and in some cases may deny that the legislative provisions are applicable. City of Burnaby, Property Transfer Tax Calculator BC 2020: PTT Tax & Exemption Information, Everything You Need to Know About Subject Clauses & Subject Removal. A time share plan does not require that the persons acquire an ownership interest in the land that is the subject of the plan. NOTE: Licensees should be aware that issues involving unauthorized accommodation often include construction or improvements to the property which could result in an order for demolition of the structure, a requirement by a municipal/city authority to upgrade to present bylaw requirements or for the removal of the addition and changes since the last inspection, the nullification of insurance, and a potential difficulty to mortgage the property. The end result may be a collapsed transaction, the buyer’s deposit may be at risk, and the seller may suffer losses as a result of the transaction not proceeding. If land in BC is being offered in trade, then who will pay the cost of conveyance, including the Property Transfer Tax? Where the buyer has not received independent advice regarding GST liability, exemptions, or rebates, prior to entering into a Contract of Purchase and Sale, the following clause should be inserted into the Contract: Subject to the (select either Buyer or Seller) receiving and approving information or professional advice concerning the (select either Buyer or Seller) GST liability, GST exemptions or GST rebates, on or before (date) . In this way, the buyer’s agent could obtain a disclosure form from the licensee offering real estate for sale or lease prior to writing up the offer. The licensee must not assume that all leases or rental agreements from a common landlord are identical. Inspection Contingency. NOTE: Because of the complexity of the application of the Goods and Services Tax to real estate transactions, it is strongly recommended that licensees not give advice with respect to the application of the Goods and Services Tax to particular situations. In some cases, parking spaces may be designated as a separate strata lot. Seller will assign the Buyer all rights, title and interest and the Buyer will assume all payments, obligations and covenants in the lease. NOTE: A survey of owner-builders conducted in 2007 found that the majority of purchasers of owner-built homes did not receive a disclosure notice and did not know whether or not their home had home warranty insurance. All onsite wastewater treatment systems need regular ongoing maintenance. The parties should be referred to their respective legal advisers if liens are filed. 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. The Archaeology Branch may be contacted as follows: Ministry of Tourism, Culture and the Arts Archaeology Branch, Website: www.for.gov.bc.ca/archaeology/index.htm — will open in a new tab, Excerpt from Trading Services | Section 7. 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. To clarify that the necessary disclosure has occurred prior to entering into a Contract of Purchase and Sale, licensees are encouraged to include the following clause in the Contract of Purchase and Sale: The Buyer/Seller acknowledges having received and signed a disclosure of the licensee’s interest in the transaction before the making/receipt of this offer. Where the buyer acknowledges responsibility for paying the GST, the licensee should insert the following clause into the contract: The Buyer confirms the receipt of independent GST advice concerning the obligation to pay GST and will be responsible to pay any GST and apply for any GST rebate in connection with this transaction. NOTE: Amounts (A) and (B) must equal total purchase price. Licensees must remember that an Occupancy Permit does not mean that all deficiencies have been finished (i.e., landscaping). As evidence of such testing, the Seller attaches the following documents: The buyer accepts the condition of the (select either building or property) in reliance on these documents. a multiple offer scenario). It is essential that licensees obtain a search of title on all listings. Are there any restrictive covenants or easements on title? Tenant Occupied Properties. This is to ensure that you know the life expectancy of the major parts of the home that you’re purchasing, and what you may need to fix/maintain immediately and over time. The Seller will pay a discount to the (select either mortgagee or broker) on the (select either first or second) mortgage arranged by the Buyer, sufficient to yield the mortgagee an interest rate of ___ %** per annum, calculated (select either half-yearly or monthly), not in advance, for a term of ___ years, but the amount of discount and buy-down costs may not exceed $(amount) in total and will be deducted from the proceeds of sale due to the Seller on completion. The following issues should be addressed: 1. Licensees who act for buyers should caution their clients that questions on the PDS worded ‘‘Are you aware…’’ refer only to the present tense. Any indication of issues regarding the finances or physical condition of the strata corporation or building may necessitate the further investigation of minutes beyond the two-year requirement. All licensees providing trading services should carefully review the amendments to the Regulation — will open in a new tab. When listing a strata lot to which the exclusive use of a LCP parking stall/storage locker is designated the listing should indicate that the parking stall/storage locker is LCP. The results for such testing indicated that (describe condition) is acceptable and, accordingly, no further action has been taken. A strata lot does not exist until the strata plan is deposited at the Land Title Office. If relevant, a Form “B” Information Certificate from the section dated (date), attaching the section’s rules, current budget, the developer’s Rental Disclosure Statement (if any), and the most recent depreciation report obtained by the strata corporation (if any). Subject removal can go as follows: A normal subject removal period is 7 days, but in a hot market this time can be as quick as 24 hours (with limited subjects). It just means that the buyer can safely occupy the house; however, the clause also says the seller (builder) ‘‘must have finished all work’’, so if there are still deficiencies at the time of completion, the deficiency holdback clause should be added as an addendum to the Contract of Purchase and Sale and delivered to the conveyancer, who will then hold back the appropriate amount. If the parking stall/storage locker is part of a strata lot, the new purchaser will automatically own and therefore have the use of the area when the strata lot is purchased. Licensees should obtain professional advice from lawyers and accountants regarding the form of a contract. Land, time shares, vehicles, boats, and jewellery may be offered and considered. 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. The seller had argued that this was a minor defect of title, which would not seriously interfere with the buyer’s use and enjoyment of the property. See the section entitled ‘‘Option Clause’’ for more information. The Form B must indicate whether the Strata Council has given approval for the use, whether the parking stall or storage locker is rented on a monthly basis and if so, the amount of the rent or alternatively, whether the parking stall or storage locker has been allocated by an assignment from the owner developer. If the seller requires more information on the parking stall/storage locker that was assigned as part of the sublease, the seller may need to obtain legal advice. Licensees should review the section regarding ‘‘ Contracts under Seal’’. Therefore the 8 and 15 day periods do not start until 4 days after the request was faxed, mailed or emailed to the strata corporation or strata manager. Licensees in smaller centres not served by a Canada Revenue Agency office may call 1-800-959-1953. This warranty shall survive and not merge on the completion of this transaction. If approved such statement will be incorporated into and form part of this contract. A buyer’s agent should still recommend a property inspection, even where there is a PDS that is incorporated into the Contract of Purchase and Sale. For licensees representing sellers of properties with onsite wastewater treatment systems, there are a number of details they should be familiar with, in order to provide informed and competent service to their clients. To meet the Canada Mortgage and Housing Corporation’s (CMHC) requirements, water potability must meet the provincial standard, or in the absence of such standard, Health Canada’s Guide on Canadian Drinking Water. 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. Subject to the Buyer receiving, perusing and being satisfied with the franchise agreement on or before (date) . Subject to the Seller providing to the Buyer a copy of the home warranty insurance policy, and the Buyer being satisfied as to this policy, on or before (date) . If no disclosure has been made by the seller in this regard, RECBC recommends that licensees acting for buyers encourage including the following clause in the contract of purchase and sale to confirm that the property has not been used to grow or manufacture illegal substances: The Seller represents and warrants that, during the time the Seller has owned the property, the property and the buildings and structures thereon have not been used for the illegal growth of any substances or growth or manufacture of any illegal substances. This means wastewater must be treated on the property, in accordance with the provincial Sewerage System Regulation, using what is known as an “onsite wastewater treatment system.”. It happens, at times, that the seller/buyer of the first offer may seek to renegotiate terms and conditions of the first offer. Conditions) Typically, real estate contracts in Vancouver include a few conditions on the contract that allow the Buyer to do some due diligence prior to officially purchasing the property. The time period involved in an agreement for sale, whereby a seller can take action against a buyer who is in arrears on payments in an agreement for sale, is now the same as that for a mortgage. Real estate contracts are assignable under the law unless the contract expressly forbids it. The life lease may or may not be registrable. Sellers will often insert an “as is” clause into real estate purchase contracts to avoid future liability for misrepresentation regarding the condition of the property being sold. * BC Housing, Licensing and Consumer Services has outlined a number of additional methods for resolving disputes, including mediation, arbitration and litigation. As a result, the seller should seek legal advice from a lawyer familiar with strata property issues prior to entertaining offers. Buying a property is never a simple affair, and there are risks associated with every type of home that you may buy. Such indemnification includes without limitation any liability of the buyer under the British Columbia Environmental Management Act. 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. Subjects can be customized to the needs and wants of the buyers, especially if you’re not in a multiple offer scenario is you have more flex room as to what you want. Notice that the preprinted wording in the Contract of Purchase and Sale does not except easements or building schemes and such from the seller’s obligation to deliver clear title. They could not do any watering in the yard and they flushed the toilets only when absolutely necessary. Life leases generally obligate the lessees to pay monthly charges related to the maintenance and operation of the development. Licensees should be aware that there may be restrictions on the property that may affect its use or value that are not registered against the title. Subject to the Seller entering into an unconditional Contract of Purchase and Sale with the Buyer for the purchase of the Buyer’s property described as (describe property) on or before (date) . For any contracts entered into prior to April 1, 2013, and which close after April 1, 2013, there are certain rules for the transition from HST to GST and PST that may impact a buyer or seller’s obligations with respect to the payment of GST or PST. If the builder agrees to a builders lien holdback, a licensee can use the following clause to provide for a holdback. Sections 36(3) and 59(1) of the Strata Property Act and section 25 of the Interpretation Act effectively give the strata corporation eight days, following a request, to deliver a Form B – and up to 15 days to provide copies of the other records referred to in the following clause. This pre-authorization only applies to a release of funds to a lawyer or notary. If a parking stall/storage locker is designated as LCP, whether by the developer, or by the owners at a later time, the parking stall/storage locker is automatically available for use by the owner of the strata lot to which the parking stall/storage locker is designated. The Seller is relying on the Buyer’s declaration of entitlement to the Rebate and shall not be responsible if the claim is disallowed. 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. Regardless of whether the transaction involves a developer or a single unit resale, licensees should be knowledge- able with respect to the proportion of the share capital acquired by the purchaser, the allocation of ongoing maintenance and operating costs, the presence of any other assets or liabilities that the cooperative association may have, the terms of the agreement which restricts an owner to using only a portion of the land that the cooperative association owns, the applicability of the homeowner’s grant and property transfer tax, and the particulars of the cooperative association’s share capital, such as provisions related to voting rights or restrictions on transfer. If you are thinking of buying a home in the near future and are looking for a realtor to help guide you through the purchase process then give us a call at 604-765-0376. A clause such as the one below may be used, or for greater clarity, a tenancy agreement may be attached as a term of the offer. Subject to the Seller entering into an unconditional agreement on or before (date) to purchase another residence. 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. Because the marketing of strata lots, cooperative interests and shared interests are specifically addressed in the Real Estate Development Marketing Act and because the definition of marketing includes selling or leasing, the offering of a long-term lease of a strata lot, cooperative interests or shared interests already requires compliance with the Real Estate Development Marketing Act. Assignors should determine whether GST applies as a result of the assignment. When someone says, ‘‘I want the water tested’’, a licensee should be clear what tests the client wants conducted on the water and a condition should be included in the offer to purchase to meet those standards to the buyer’s satisfaction. City of Port Moody It is also not acceptable for a term to be created in the contract, which states that the seller will provide a copy of the Disclosure Statement to the buyer. Licensees should treat such offers with the same precautions or qualifications as they would traditional transactions and with added considerations depending upon the nature of the property being offered in trade. If you try to back out of the deal, you will forfeit your deposit money and also risk being sued for damages. Policy Statement 13 – Real Estate Securities — will open in a new tab issued by the Superintendent’s office sets out an explanation of real estate securities and includes reference to the related documents issued by the Securities Commission. A negative answer does not mean that there has not been a problem in the past or that a past problem will not recur. For this reason, a buyer’s agent should always advise a buyer to have an independent inspection of a property and the licensee should explain the importance of why such an inspection is necessary and that licensees are typically not qualified to provide home inspection advice. Coquitlam Schools The Heritage Conservation Act is concerned with activities that may alter heritage sites automatically protected under the legislation. The Agreement for Sale will provide that if the Buyer disposes, or agrees to dispose of his or her interest in the property, the full amount then owing under the Agreement for Sale will immediately become due and payable at the Seller’s option. If not, ensure that your client understands that the water supply cannot be guaranteed, that a good well can go dry with little or no warning and that even a good well may be subject to seasonal fluctuations. Seller will provide reasonable assistance, at the expense of the Buyer, in obtaining consent to the assignment of the lease before the Completion Date. Restrictive Covenant in Real Estate: Everything You Need to Know About Restrictive... Home Pricing Strategies for Sellers: How to Determine List Price for a Hous... What is Subject Removal and How Does it Work? the park owner may only withhold consent for one of the permitted grounds set out in the regulation. If the buyer has entered into a Contract of Purchase and Sale, the following subject clause may be used to allow time for the contract to become unconditional: Subject to the sale of the Buyer’s property at (address)becoming unconditional on or before (date). ** Term expiry date to correspond to underlying mortgage. 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. The contract must state clearly whether or not the price includes inventory. However, if you only have a subject to inspection listed then you may be able to shorten you subject removal period to 24 hours. While the intent of the Heritage Conservation Act — will open in a new tab with respect to archaeological sites is to balance a respect for heritage and a property owner’s right to develop, some private landowners may face costly archaeological studies and/or limited use of their land. Alternatively they may refer the matter to the designated arbitrator (if one is designated in the deficiency clause) or if the clause simply refers to the Commercial Arbitration Act, they may start the process of invoking that Act and choosing an arbitrator. The holder of the head lease, the corporation which owns the building, determines how units in the building are purchased. In a number of developments the developer has entered into a lease of the common property parking stalls/storage lockers to itself or to a company related to the developer. The particular portion may be an apartment or a recreational vehicle site. On the Internet, government publications are available at www.cra-arc.gc.ca — will open in a new tab. ROWPS are registered with the Applied Science Technologists & Technicians of British Columbia (ASTTBC), which recognizes four categories of practitioners: Before beginning construction of an onsite wastewater treatment system, the authorized person must file the system’s plans and specifications with the local health authority. If a licensee is going to hold or receive a deposit which the parties have agreed will be delivered to and held by someone other than that licensee’s related brokerage, a separate written agreement must be obtained. The Buyer acknowledges having received and having had an opportunity to read the developer’s Disclosure Statement. If the licensee were to pay, the inspector could be suspected of not wanting to jeopardize the transaction of the person paying him or her, who might or might not ask for his or her services in the future, depending on the conclusions of the inspection report. In the event there is any question whether the sale price is sufficient to cover financial encumbrances and real estate commission, licensees should protect the seller (and themselves) by use of the following clause in the contract: Subject to the Seller’s confirmation and satisfaction with the arrangement of financial affairs, on or before (date), which enable the Seller to proceed with this sale. In situations where the existing services were not approved or the site cannot be approved for new services, the prudent licensee should protect the parties to the transaction by noting the same in the contract. This Time Clause will start running on delivery of this Notice to the Buyer or to (his or her representing brokerage) which will be at (time of delivery of notice) o’clock (select either a.m. or p.m.) on (date). Section 4 of the Residential Tenancy Act provides that the Act does not apply to living accommodation rented under a tenancy agreement that has a term longer than 20 years. § NOTE: The use of this or a similar clause in the Contract of Purchase and Sale does not replace the requirement to have made such a disclosure on a separate document prior to the offer being accepted. DEPOSIT: A deposit of $1,000, which will form part of the Purchase Price, will be paid on the following terms: All monies paid pursuant to this section (Deposit) will be delivered in trust to [Name of the Party to Hold the Deposit] and held in trust in accordance with the provisions of the Real Estate Services Act.’’. Buyers can’t remove this subject clause during the … In real estate, right of first refusal is a provision in a lease or other agreement. Another type of ownership, which fits between cooperative and strata on leased land, is the rental lease, where the cooperative building sits on leased land. When such funds are received a strata corporation may decide that some or all of these funds are to be returned to the owners. This condition is for the sole benefit of the (select either Seller or Buyer) . Subject removal is typically 7 days long; however, a buyer can choose to shorten this period if they feel necessary. In some cases, a seller wishes to remain as a tenant after the title has transferred to the buyer. CAUTION: This clause is to be used only in conjunction with the ‘‘New First Mortgage Clause’’ detailing the mortgage to be arranged by the Buyer. 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. 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. Acting For Sellers. The Buyer hereby consents to the Seller obtaining a credit report on the Buyer. The buyer can rely on the Form B to indicate which parking stall/storage locker is allocated to the strata lot being purchased, however the buyer’s agent should clearly point out the statement on the Form B that indicates that where the designation of the parking stall/storage locker is common property, the allocation is subject to section 76 of the Strata Property Act and may be subject to change in the future. the offer contains the Standard Assignment Terms; the offer is silent with respect to assignments; or. 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). NOTE: Following amendments to RESA in 2015, unless the money received is cash, a separate written agreement is no longer required, so long as the brokerage takes no action in relation to the money other than to deliver it to the person to whom it is payable. Sometimes, the warranty is not transferable and the next owner does not qualify. More detailed enquiries may require up to two weeks. In some cases, in addition to a buyer wanting to have the property inspected, a seller may also want such an inspection before listing the property for sale so that the seller is aware of what issues the property inspection report may identify. Licensees must be aware of the problem associated with inventory. Strata unit: lesser of the first owner’s purchase price or $100,000. The Seller will promptly deliver a copy of the relevant resolution or notice of resolution to the Buyer. A leasehold unit is a unit in a residential leasehold complex which is defined as containing one or more buildings capable of being used for leasehold residential purposes other than buildings comprised of strata lots, cooperative interests or shared interests in land. * Fill in the same number of hours as in preceding clause. Owners must not make alterations to the unit (unlike strata ownership) without permission from the cooperative association. In addition, licensees should be aware that their Real Estate Errors and Omissions Insurance Indemnity Plan excludes coverage for licensees when they are either buying or selling real estate. Most real estate agreements are conditional on the buyer being satisfied with a home inspection. DEPOSIT: A deposit of $1,000 which will form part of the Purchase Price, will be paid on the following terms: within 24 hours of acceptance of this offer.’’, ‘‘All monies paid pursuant to this section (Deposit) will be delivered in trust to ABC Big Realty and held in trust in accordance with the provisions of the Real Estate Services Act.’’. pursuant to the Canadian Bar Association (BC Branch) (Real Property Section) standard undertakings (the “CBA Standard Undertakings”). Where the listing licensee has not already obtained the documents, such that the listing licensee must now request them from the strata corporation, it may take up to 18 days for subject removal. A cooperative interest is the interest that includes both a right of ownership in the shares of a cooperative association or to be a partner or member in the cooperative association and the right to use or occupy a part of the land in which the cooperative association has an interest. * This is the ‘‘bought-down’’ rate (i.e., what the Buyer wants). That sort of evidence has the potential to generate considerable sympathy at trial. Excerpt from Trading Services | Section 1. Licensees acting on behalf of buyers often rely on title search documents provided by the seller or, alternatively, request that the seller make such documents available for the buyer’s review. Effective March 1, 2009, providing a property inspection for a fee became an activity for which a licence is required. Sellers may need to obtain a ruling from the local GST office on what constitutes ‘‘substantial’’ and keep a record of the official who rendered that opinion. any provisions for renewal do not extend the total lease period beyond one year. (vii) Deposit Payable on Acceptance or Within a Stated Time Period. The Curtins bought a strata property from the Blewetts. The events that trigger the Force Majeure clause must be clearly defined in the clause. Ω If not using the standard form Contract of Purchase and Sale refer to ‘‘Contracts under Seal” …. Subject removal is a real estate process in which buyers perform due diligence on the subjects (or conditions) that were offered in the original contract. ** The period usually ranges from 24 to 72 hours, depending on market conditions. The Real Estate Development Marketing Act defines a cooperative association as. NOTE: The negotiation details for the purchase of the buyer’s property must be set out in a separate Contract of Purchase and Sale. is the agency responsible for property inspector licensing. 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. For example, restrictions relating to Riparian Areas Regulation — will open in a new tab under the Fish Protection Act — will open in a new tabor archaeological sites under the Heritage Conservation Act — will open in a new taband others that are not currently registered on title may have substantial impact on use or value. The contract reads, in part: The Buyer agrees to purchase the Property from the Seller on the following terms and subject to the following conditions: 9. While the buyer will not be able to change the level of coverage provided under warranty, he or she may be concerned about the length of the remaining term of the policy. Under RESA, the need for disclosure includes: The need for disclosure arises whenever a licensee is disposing of real estate, regardless of whether the licensee has personally listed the property for sale. In a case where a utility that owns a non-financial charge has assigned its charge to secure a loan or some other financial obligation, a licensee may attach a current copy of the title search results to the Contract of Purchase and Sale and use the following clause: The Buyer acknowledges and accepts that on Completion the Buyer will receive title containing, in addition to any encumbrance referred to in Clause 9 (TITLE) of this contract: 2. If the seller expresses a desire to retain certain rights or benefits (e.g., the right to recover funds payable after completion of a sale, the right to vote on future decisions with respect to the possible recovery, etc. For example, an associate of an individual licensee includes a company of which a spouse or family partner is entitled to not less than 5% of the profit. If a surface search is not available from this source, one may be obtained online through the Land Title and Survey Authority, by registering for a myLTSA account — will open in a new tab or directly from the appropriate Land Title Office — will open in a new tab, at a cost. Licensees should also know whether there is any litigation under way or pending that may result in a financial recovery. The Seller will allow reasonable access to the Buyer for purposes of reviewing the inventory for purposes of this condition. These minutes may contain changes in bylaws or a notice of motion to change bylaws that would be significant to the buyers’ decision to purchase. Licensees should note that children and parents do not fall within the definition of ‘‘associate’’. Licensees should also advise the buyer and seller to seek legal advice regarding their respective risks in this situation. Often, these charges are payable as rent. *** In order to protect the Buyer, this amount should be at least as large as monthly payments on the underlying mortgage. The Buyer accepts the property and the buildings and structures thereon in their present state, and in an ‘‘as is’’ condition. Ω If the seller has not sought legal advice before signing the offer, a subject clause similar to the one here should be added allowing him or her to obtain such advice. There is no GST New Housing Rebate for the GST for properties that are valued at $450,000 or higher. Licensees can also request from the Archaeology Branch a copy of a map that identifies registered sites in a specific region of the province. Real estate clauses for contract: This blog post is everything you need to know about subject clauses & subject removal to stay safe when purchasing a home. 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. Accessing the required documents from health authority offices or archives may take several days. For details, see Documents to Request and Their Significance. 2. If the listing licensee already has all of the records listed above, choose a reasonably short subject removal date. The following clause should be used when the buyer wants a lawyer to look at the physical encumbrances and explain the consequences of them: Subject to the Buyer confirming on or before (date) that zoning for the Property is (indicate desired zoning) . Some clauses allow a seller to disclose or warrant and the buyer to acknowledge and accept (or accept the warranty of) the latent defects previously described. When Randy writes offers, the deposit clause reflects this, but Randy typically agrees to deliver the deposit cheque when received. This deposit is to be placed in an interest-bearing trust account with interest accruing to the benefit of the (select either Buyer or Seller) . View listing photos, review sales history, and use our detailed real estate filters to find the perfect place. NOTE: Licensees are advised that the timing requirements for builders lien holdbacks is a complex area of law and they are well advised to have their clients seek legal advice in situations involving new or recent construction. In this case, in addition to providing, as an exception to clear title, that the buyer will receive title containing the utility’s right-of-way, the contract should also record the utility’s mortgage of its right-of-way, being a financial charge payable by the utility. The Buyer accepts the strata lot in its present state, and in an ‘‘as is’’ condition. The application of the Goods and Services Tax (GST) to real estate transactions is complex. These funds might be the result of judgments, insurance/warranty claims, or settlements. Licensees who advise and assist their clients in obtaining clear and certain information as to their financial obligations at the time of listing a property, place their clients in a position of being able to make informed decisions when considering any offers. Accordingly, most, if not all, aspects of the law governing landlord and tenant relationships will apply and licensees should be aware of their duties and responsibilities, which apply to all lease transactions. Additional Buyer Assignment Clause Where the buyer wishes to have an express right to assign the contract by adding a specific buyer prior to closing (e.g. If a tenancy agreement is available, the licensee should attach a copy of it as part of the Contract of Purchase and Sale.