A Step-by-step Guide to Forms and Contracts
“Working With A Real Estate Agent”
Buyers and sellers will be presented with this brochure at the earliest contact with a real estate agent. Industry regulations have now made it mandatory for a real estate licensee to disclose the capacity in which the agent will be working with you: i.e. as a buyer’s agent, a seller’s agent or a dual agent, before assisting or representing you in a real estate transaction. The agent will ask you to sign this form acknowledging that this disclosure of agency representation has taken place.
Signing the disclosure statement in the Working with a Real Estate Agent brochure does not bind you to any obligation to that real estate agent. It merely confirms that you have discussed your agency representation options with the agent.
Property Disclosure Statement (PDS)
Every residential listing placed on the MLS must be accompanied by this form which is filled out by the seller at the time the property is listed for sale. The seller indicates his or her knowledge of various aspects of the property, defects of which he is aware, and any upcoming expenses (as in special assessments in strata-titled properties).
The REALTOR is not permitted to fill out the form. The REALTOR will keep a copy, and may file a copy with the MLS listing in the real estate board. The form does not cover every aspect of the property. A buyer is still advised to consult an independent inspector if there are questions that are not adequately answered.
When you as the buyer make an offer to purchase a property, you will be advised to request and review this form as one of your subjects to the contract.
Limited Dual Agency Agreement
This form is used when the agent represents both the buyer and the seller in a single transaction. It is used when the situation involves either one salesperson who represents both the buyer and the seller, or when two salespersons from the same company are involved.
This agreement modifies the prior Listing Contract and the Buyer’s Agency Contract (or verbal buyer’s agency agreement) and gives the agent the authorization to represent both parties in a limited capacity. It authorizes the agent to maintain both parties’ confidences regarding motivation, negotiating positions and personal information (unless either party gives the agent written permission to disclose such information).
Contract of Purchase and Sale
The Contract of Purchase and Sale standard form is the basic contract signed by the parties (the sellers and the buyers). It outlines every aspect of the transaction, including the price, the terms and conditions, the dates, the inclusions and exclusions, the handling of existing tenancies, the deposit and increase (where applicable) and other legal matters as described in the preprinted contract and added as clauses.
Addendum (With Printed Clauses)
The basic contract will be accompanied by a special addendum form with preprinted clauses where there is either financing to be cleared from the title before the seller can provide clear title, or where there is financing to be put into place after the title is registered in the buyer’s name. The addendum also includes clauses covering the treatment as originals of reproductions of signatures that are sent via telecommunications, issues relating to deposit monies and acceptance by the buyers regarding the size of the property.
Amendment to Contract of Purchase and Sale
This form is used to remove conditions (subject removal). We will present this form to the seller and his or her realtor when we have removed all of our subjects. Time remains of the essence and thus we must be diligent to remove all of our subjects by the date stated on the contract. On the other hand, if we discover something that prevents you from wanting to carry out the sale we would contact the seller’s realtor and inform them that we would not be removing subjects and that the deal had “fallen through”.
Usually leases are used more in commercial transactions than in residential ones, but you may be a landlord or a tenant who prefers to use a lease for a specified time period for any number of reasons, including stability of tenure. A commercial lease is very involved and should be drawn up by a specialist in the commercial field and reviewed by a lawyer for each party. A residential lease is less complex and normally involves little more than a standard rental agreement with an outline of the rules and regulations of the building or complex, or expectations of the owner and tenant above and beyond what the Residential Tenancy Act sets out. If you have any doubts about how to draw a lease or how to interpret specific clauses, consult a lawyer or a REALTOR.
Mortgages come in a wide variety of formats, depending on the lending institution. Now, many institutions use a simplified form and make reference to the larger form where any deviations from clauses in their standard form may occur. The buyer should check that the document matches the commitment letter they have signed outlining the terms, including the interest rate, the term, the amortization period, prepayment privilege (“penalty”), the options (if any) for increasing the number of payments or making lump sum payments, the assumability of the mortgage if the property is sold, and the portability of the mortgage if the seller wishes to use it on another property.
If you are a seller who is carrying financing for a buyer of your property, make sure that your lawyer reviews the documents before you sign them. If you are a buyer who is asking a seller to carry financing, make sure your own lawyer reviews the documents as well. Many serious issues may arise where the parties are unfamiliar with the law concerning mortgage financing.