Deposits

Standard Forms Spotlight: Buyer’s Deposit Paid by a Third Party

The BCREA Standard Forms team has received several great questions about what to do, if anything, when a buyer’s deposit is paid by a third party, such as a family member or a client’s business account. To help ensure REALTORS® are aware of their obligations, we’ve compiled a list of frequently asked questions on third-party

The Value of Going Cashless

Cashless deposits aren’t mandatory, but they sure are best practice So your clients have put an offer down on their dream property. The offer is accepted and the next step is to put down the deposit. In most cases, your client will already have contacted their bank and lined everything up to make the transfer.

Forfeiture of Deposit #453

Legally Speaking

Section 12 of the standard Contract of Purchase and Sale provides that unless the balance of the purchase price is paid on the completion date “the Seller may, at the Seller’s option, terminate this Contract, and, in such event, the amount paid by the Buyer will be absolutely forfeited to the Seller…on account of damages

Collecting An Unpaid Deposit #437

Legally Speaking

If a buyer defaults before a deposit is fully paid, can the seller terminate the Contract of Purchase and Sale and successfully sue for the unpaid deposit money? It depends on the contract. In Agosti v. Winter1, a standard form Contract of Purchase and Sale2 required a $10,000 deposit, “upon subject removal.” No other deposit requirements were

“Time is of the Essence” Means “Time is of the Essence” #412

Legally Speaking

By Edward L. Wilson Lawson Lundell LLP Many REALTORS® assist buyers in locating and negotiating the purchase of new condominiums in pre-build situations. The developer’s form of contract is generally used and such contracts often provide for staged deposits, often over long periods, which invariably contain “time is of the essence” clauses. A buyer entered

Human Rights Code Complaint Against Licensee by Another Licensee; Minor Defect in Comparison With Larger Contract Benefit Didn’t Justify Repudiation #401

Legally Speaking

By Gerry NeelyB.A. LL.B. “Don’t shoot the messenger”—this must have been the reaction of a licensee against whom two complaints of discrimination under the Human Rights Code were made by another licensee. The first was discrimination on the basis of family status with respect to a service customarily available to the public under s. 8.

Contract of Purchase and Sale – Clause 18 #344

Legally Speaking

By Gerry Neely B.A. LL.B I understand it is the standard practice of a licensee to explain the significance of the Contract of Purchase and Sale terms to the parties to it, before it is signed. This is particularly desirable for Clause 18, in which the parties agree there are no representations, warranties, etc. other

Condominium Act – Loss of Owner’s Right to Vote; Contract of Purchase and Sale – Paragraph 9 Exclusions of Representations, Etc. #268

Legally Speaking

By Gerry Neely B.A. LL.B Section 125(6) of the Condominium Act states that except where a unanimous resolution is required, an owner is not entitled to vote at a general meeting, unless all contributions payable for the owner’s strata lot have been paid. An owner/developer of a newly-created strata corporation, who follows the not uncommon

Purchaser's Knowledge of When Approval of Financing Given; Criminal Rate of Interest; Is an Application to Discharge a Mortgage Sufficient Evidence of Clear Title? #194

Legally Speaking

By Gerry Neely B.A. LL.B What are the legal consequences for a purchaser whose Contract of Purchase and Sale was subject to raising a mortgage by October 19, 1990, when the purchasers were not made aware that the mortgage had been approved by that date. The purchasers contracted to use their best efforts and it

Clause One – Contract of Purchase and Sale; Condominium Bylaw #188

Legally Speaking

By Gerry Neely B.A. LL.B Column #160 discussed a Vancouver case where a purchaser was successful in avoiding the completion of a purchase because the vendor was unable to remove a private easement charging his property for the benefit of adjoining property easement. He was successful because clause one of the standard form Contract of

The Stakeholder Provisions of Section 48 of the Real Estate Act, and the Method of Dealing With a Deposit Where There Is a Dispute Between Parties #135

Legally Speaking

By Gerry NeelyB.A. LL.B. The stakeholder provisions of Section 48. of the Real Estate Act are so well known to agents that the disposition of the deposit where there is a dispute between the parties is routinely dealt with. A recent decision supports a reexamination of part of the method suggested on page D-15 of the Professional

Property Purchase Tax Act and Other Odds and Sods #104

Legally Speaking

By Gerry NeelyB.A. LL.B. The Property Purchase Tax Act, although it has only received first reading, is here to stay. The amendments to the Bill published in the Orders of the Day of May 19, 1987, primarily remove ambiguities from the Bill as originally drafted. They do remove the original perceived inequities that would have

Commission – Solicitor’s Liability for Payment; Garnishee Orders #92

Legally Speaking

By Gerry NeelyB.A. LL.B. The decision of an Ontario District Court Judge is good news for licensees but bad news for solicitors who are too dutiful in carrying out their clients’ instructions. A vendor had accepted an offer containing in the standard form of offer to purchase the following words: “the undersigned accepts the above

Commission – Purchaser’s Default #90

Legally Speaking

By Gerry NeelyB.A. LL.B. You have a listing agreement with a vendor, a binding contract of sale is signed but the sale collapses because of the vendor’s refusal to complete. The Courts will enforce your claim for commission even though the listing contract does not specifically state what your rights are where the vendor is

Back-Up Offers #89

Legally Speaking

By Gerry NeelyB.A. LL.B. A vendor’s decision to take a back-up offer can be risky to the vendor’s financial health, as will be apparent from your review of the following facts. An agent brought to an owner on November 8, 1983, an offer to purchase the owner’s property for 54,550,000.00, calling for a deposit of

Lease, Agreement To – Void for Uncertainty #85

Legally Speaking

By Gerry NeelyB.A. LL.B. Lance lay on the chesterfield, his headache just beginning to respond to his wife’s soothing cool hand on his forehead. The cause of his headache – a three-day trial and a judgment that was a blow to Lance’s pride. You see, Lance thought of himself as an expert in leasing property,

Agreements for Sale #68

Legally Speaking

By Gerry NeelyB.A. LL.B. A recent amendment to the Law and Equity Act may mean that the time-honoured method of selling property by way of an agreement for sale (right to purchase) may cease. Although its use has declined over the past few decades, largely because most sales require mortgage financing, its use has been continued because

Offer or Option #57

Legally Speaking

By Gerry NeelyB.A. LL.B. The following are all abbreviated examples of the usual “subject to” clauses to be fulfilled by a purchaser, right? “Subject to approval of purchase price and terms by (name of the president of the purchasing company was added here). . . “1 “Subject to my inspection and approval of premises. .

Non-Refundable Deposits #52

Legally Speaking

By Gerry NeelyB.A. LL.B. There appears to be an increasing use in interim agreements of phrases such as “non-refundable deposit”, “at which time a firm contract exists” or “upon which this contract shall be binding upon the parties”. The use of these phrases suggests that the licensee hopes that certain legal consequences will flow from

Prospectus – Receipts #49

Legally Speaking

By Gerry NeelyB.A. LL.B. The recently distributed Bulletin referred to the intention of the Superintendent to provide additional exemptions from the provisions of the Real Estate Act relating to prospectuses. Since there is no present intention to eliminate the prospectus requirements in their entirety, a B.C. Supreme Court Decision highlights the necessity of complying with Section 50(7)

Deposits #43

Legally Speaking

By Gerry NeelyB.A. LL.B. While it is not necessary to have a deposit in order to create a binding contract, having a deposit or even the promise of a deposit has proven to be beneficial to vendors where the purchasers have declined to proceed with their purchases. This can be equally as important to the

Damages, Deposits; Separate Legal Representation for Vendors #26

Legally Speaking

By Gerry NeelyB.A. LL.B. In an Ontario case which arose because of a purchaser’s refusal to close a real estate transaction, the vendors were awarded S5,000.00 general damages for the “vexation, frustration, distress and anxiety, caused solely by the failure of the Defendants (Purchasers) to complete this transaction upon the date agreed upon.” This was

“Best Efforts” Cases #9

Legally Speaking

By Gerry NeelyB.A. LL.B. Very occasionally a prospective purchaser for whom an offer to purchase is being prepared, asks for the insertion of a condition in the agreement such as “subject to financing…” because he is not entirely certain whether he wants to buy the property. The reasoning of course is that if he decides

Clauses in the Offer to Purchase #8

Legally Speaking

By Gerry NeelyB.A. LL.B. The Offer to Purchase used by the Multiple Listing Service of the Victoria Real Estate Board contains the following clauses:” . . . Balance of cash payment to be deposited in trust by the purchaser by 5 p.m. on ____________,19__. Balance of cash payment to be made to the Vendor and

Increasing Deposit #2

Legally Speaking

By Gerry NeelyB.A. LL.B. Every vendor wants as large a deposit as possible, while no potential purchaser wants to tie up a relatively large sum if he is unable to get the financing which is the condition precedent to his purchase of the vendor’s property. As a result, the offer to purchase may contain the