nsar standard forms guide - phase i - april 30

Transcription

A Guide to Completing the Agreements of Purchase and Sale Introduction This guide provides a step‐by‐step explanation of the residential Agreements of Purchase and Sale (Mandatory Forms 400 through 407, inclusive) and how they should be completed. It can be printed and read in its entirety or specific sections can be accessed, as needed. In addition to explanations of how various clauses should be completed, this guide also provides tips and pitfalls to avoid in using these forms effectively. You are encouraged to use this guide to contribute to the effective representation of your clients and customers and to further your understanding of real estate transactions and your role in them. Which Mandatory Forms to Use Most residential real estate transactions are very similar in many ways but certain types of properties give rise to specific issues that are particular to that type of property. As a result, it is important to choose the correct form when preparing an offer. A two‐part form system (with one exception) is used for maximum efficiency and flexibility. Form 400 – Agreement of Purchase and Sale Part I: Common Clauses is used in conjunction with the following versions of Part II, tailored to specific property types, as described in the form names: • 401 ‐ Agreement of P & S Part ll: Residential (Resale) •
402 ‐ Agreement of P & S Part ll: Resale Condo •
404 ‐ Agreement of P & S Part ll: Vacant Land – Urban •
405 ‐ Agreement of P & S Part ll: Vacant Land – Rural •
406 ‐ Agreement of P & S Part ll: Mini/Mobile Home •
407 ‐ Agreement of P & S Part II: Multi‐Unit Residential‐Income Property 403 ‐ Agreement of Purchase and Sale for Turn Key New Construction (House & Land) is the exception to the two‐part system. This is a stand‐alone form which contains the appropriate clauses from the general Part I form 400, along with other clauses which are specifically applicable to newly constructed homes. The use of these forms is mandatory for NSAR members. If you are unsure of which form to use for a unique circumstance, it is better to choose the more comprehensive one and strike unnecessary clauses than to choose the simpler one and have to add clauses. In some cases, you may still have to add clauses to capture the needs and intent of your client or customer. Understanding the specific clauses in all of the mandatory forms will help you be more aware of which form to use in which circumstances and help you to assess when it is advisable to add a clause to a form. NOTE: If removing a clause that is part of the Agreement, the clause would be ‘struck’ and the party or parties to the Agreement would initial in the margin next to the clause. 1 TABLE OF CONTENTS FORM 400 ‐ AGREEMENT OF PURCHASE AND SALE PART I: COMMON CLAUSES FORM 401 – AGREEMENT OF PURCHASE AND SALE PART II: RESIDENTIAL SCHEDULE FORM 402 – AGREEMENT OF PURCHASE AND SALE PART II: RESALE CONDO FORM 403 – AGREEMENT OF PURCHASE AND SALE TURN KEY NEW CONSTRUCTION FORM 404 ‐ AGREEMENT OF PURCHASE AND SALE PART II: VACANT LAND URBAN FORM 405 – AGREEMENT OF PURCHASE AND SALE PART II: VACANT LAND RURAL FORM 406 – AGREEMENT OF PURCHASE AND SALE PART II: MINI/MOBILE FORM 407 – AGREEMENT OF PURCHASE AND SALE PART II: MULTI‐UNIT RESIDENTIAL INCOME PROPERTY 2 Page 3 Page 16 Page 22 Page 32 Page 54 Page 60 Page 64 Page 69 4
400 Agree
ement of Purchase an
nd Sale Paart I: Comm
mon Clausees A
Agreement of Purchase
e and Sale Scchedule(s) TThis section is used to indicate which tyype of properrty the agree ment is for byy referencingg which versio
on of Part II is attached to Part I. The
e appropriate
e one of these
e first six box es (which corrresponds to Forms 401, 4
402, 404, 4
405, 406, and
d 407) should always be ch
hecked since a Part II mustt always acco
ompany a Partt I to form a ccomplete agreement. TThe “Other” b
box may also be checked if there are anny other scheedules being u
used (in addittion to tthe standard Part II form).. If this is che
ecked, then th
he titles of suuch scheduless are to be wrritten in the space provided. Example: Sched
dule A, Schedule B, etc. Ch
heck the nam
mes of schedules and be su
ure the refereences to tthem in this ssection agree
e completely. Referring to an SOBP sch edule as “Sch
hedule A” in itts title but caalling it “Schedule B” here, will cre
eate unnecessary confusio
on. Not comppleting this seection fully an
nd accurately can lead tto one or mo
ore pages of schedules bein
ng missed by a lawyer, lennder, etc. Dep
pending on w
what is contain
ned in tthese schedu
ules, this could
d have seriou
us implication
ns for the Buyyers, Sellers and their Industry Memberrs. For example, if a schedule con
ntained a clau
use about a “ccash‐back to Buyer upon cclosing “ and
d this schedulee was en it was sentt to the lender, it could apppear that thee Industry Meember was inadvertentlyy left out whe
encouraging mortgage fraaud against th
he lender. Claause 12 of forrm 400 (Addittional Terms and Conditio
ons) is often used fo
or this purposse, instead of this section, but using thiis section is m
more efficientt since the ph
hrase “are attached
d and forms p
part of this aggreement” is aalready pre‐pprinted here vversus this ph
hrase having tto be ttyped or writtten into Clause 12. TThe total num
mber of pagess should be filled in accuraately. If this iss not completed and a pagge goes missing in ttransit, the Se
eller and theiir Industry Me
ember may not be aware it is missing.
TThe Buyer(s) legal name(s) should be filled in, using their full legaal name(s). M
Make sure you
u discuss with
h the ose name(s) th
hey wish to h
have on the offfer. If both ppersons in a ccouple are go
oing to be required to Buyer(s) who
be involved in
n securing mo
ortgage finan
ncing for the p
property beinng purchased,, then both names should also be on the offer. Otherwise, aan amendment may be req
quired later t o add the seccond name ass a Buyer. If tthe Buyer is a corrporation, the
en you must e
ensure that th
he individual you are workking with has the signing aauthority tto legally bind
d the corporaation. NOTE: Since FFINTRAC Clien
nt Identificatiion Forms for Buyers are ggenerally completed at the time an offerr is written, you sshould have tthe legal nam
mes documentted and verifieed at this poin
int, as well ass having the siigning authority con
nfirmed for a corporation. 3 Check the appropriate boxx to indicate w
whether the Buyer(s) has personally vieewed the pro
operty. If therre are ttwo Buyers and one has viewed and on
ne hasn’t, che
eck both boxees and write tthe Buyers naames beside tthe appropriate b
box. TThe Seller(s) name should be written as displayed on the listing ssheet and on the Nova Sco
otia Property Online property searrch page. If there is a discrepancy betw
ween these tw
wo sources, ccheck with thee listing Indusstry Member for tthe correct sp
pelling, etc. If the property owner is shhowing as only one person
n on Nova Sco
otia Property Online, but the liisting sheet shows two names as the Seellers, use both names on the contract as it is likely a matrimonial prope
erty situation. If uncertain
n, request thee lawyer check into this during their revview of tthe contract. TThe listing brokerage shou
uld be filled in
n as the full le
egal and licennsed businesss name of thee brokerage w
which has tthe property listed and is representing the Seller as a client. If thhe listing is a mere postingg, or other priivate sale, the listin
ng brokerage space should
d be left blankk since the saale is not bein
ng done “thro
ough the brokkerage” and the Seller is not beingg represented
d. The co‐ope
erating brokerrage name is filled in ONLYY if the brokeerage representing the Buyer (yo
our brokerage) is NOT the listing brokeerage representing the Selller. If the bro
okerage yyou work for is the listing brokerage, and you are re
epresenting thhe Buyer thro
ough designatted agency, o
or you are writing th
he offer under transaction brokerage or you are writting the offerr with the Buyyer as a custo
omer, do NOT fill in the
e cooperatingg brokerage space. There is only a co‐ooperating brokerage if a seecond separatte brokerage, otther than the
e listing broke
erage representing the Selller, is involveed. Otherwisee, this space sshould be left blank. Civic address, lot number, PID (Parcel Identification Number) andd County should all be con
nfirmed usingg a Nova SScotia Properrty Online seaarch and filled
d in complete
ely and accuraately. Lot numbers are paarticularly imp
portant w
when dealingg with vacant land or new construction and sometim
mes, in these ccases, the civvic addresses may not be available. TThe purchase
e price must b
be written bo
oth in words aand in numbeers in the spacce provided for extra claritty. DEPOSIT 1. 4 It should be noted that a deposit is not required to make the contract legally binding, but most Sellers will expect to see a deposit as a sign of good faith. The amount of the deposit being submitted by the Buyer must be written both in words and in numbers in the space provided. A Buyer’s Industry Member should always identify the means of deposit (cash, cheque or bank draft) in the agreement by circling the correct word or writing it in, and if the agreement is accepted, then the brokerage has agreed to that method of deposit. If a brokerage has a “no cash deposit” policy or “certified cheque only” policy in place, this should be listed clearly in the instructions to REALTORS® section of the listing sheet. This will prevent the problems that occur when the deposit method is not specified and the method turns out to be unacceptable to the brokerage. It is standard practice in Nova Scotia for the listing brokerage to hold the deposit and the NSREC standard form indicates this. However, the question of who (which brokerage, which lawyer) holds the deposits is a matter of negotiation between the parties. If the Buyer wishes the deposit to be held by their lawyer, then this clause must be manually modified accordingly to reflect this. As with any changes, ensure that all Buyer and Seller parties initial the change. It is best to fill in the space in the “...on or before______” phrase with a specific date such as “July 30, 2011” so that all parties are clear on when the deposit is due. The phrase “upon acceptance” is impossible to achieve unless the Buyer’s Industry Member has the deposit in hand and is present when their client’s offer is presented to the Sellers, ready to immediately hand over the cheque. The phrase “within 48 hours of acceptance” or “within 2 days of acceptance” can also be problematic since the deadline is now tied into another date and is therefore less clear than just providing a specific date reference. If a second deposit is involved, a separate clause may be added under section 12. A common practice, especially in the case of a second or “stepped‐up” deposit is for the Buyer’s Industry Member to use the phrase “when all conditions are met” as a deposit deadline. This is problematic since there are some conditions that are not met until closing date, such as a satisfactory pre‐close walkthrough. The Buyers and their Industry Member often mean “when insurance, inspection and financing conditions” when they use this phrase but should instead specify this by saying “the same day that the inspection condition is to be met” or, even better, provide the specific date reference as suggested above. When using a specific date reference, Industry Members should take into account the time which negotiations might take and must remember to adjust for the deposit timing in subsequent offers if the negotiation period spans several days. Similarly, if a re‐written offer is received with a deposit due date that has already passed due to an oversight by the Buyer’s Industry Member, the Seller’s Industry Member should adjust this date in the counter offer response or have it changed and ratified by all parties in the agreement. 5 FINANCING 2. TThe principal amount OR p
percentage (b
but not both) inserted herre should refleect the maxim
mum mortgagge ffinancing that the Buyer m
may need. Th
he percentage
e is more com
mmonly used tthan the amo
ount since thiis is less likely to need
d to be modified if the purchase price changes durinng negotiation
ns, but either method is acceptable. TThe interest rrate filled in sshould be the maximum raate the Buyerr would be willing to accep
pt on a mortgage. It has become common in rrecent years ffor Industry M
Members to fiill in “suitablee” for both th
he amount and rate. This praactice gives th
he Buyer a disstinct advant age over fillin
ng in specific amounts as itt leaves it open for th
he Buyer to de
eem any amo
ount of financcing at any intterest rate to
o be “unsuitab
ble”. Howeveer, this practice may also result in
n an agreement being deem
med unenfor ceable due to
o lack of certaainty so this p
practice d. As a Sellerr’s Industry M
Member, it is aadvisable to ccounter on th
his point and require moree specific is not advised
details. Be aw
ware that if u
using Part 1 in
n conjunction with Form 4006 for a mobile or mini‐ho
ome purchasee, the ffinancing requirements may be different. SSellers’ Indusstry Memberss often request financing cconfirmation letters from B
Buyers’ Indusstry Memberss even tthough the sttandard form
m clause does not require itt. Sometimess this is at thee request of tthe Seller or ttheir banker if theyy are purchassing another p
property but often it is jusst habit on thee part of the listing Industtry Member. Th
he standard fiinancing apprroval clause iss written suchh that financiing is deemed
d to be met unless notice to the contrary is re
eceived in wrriting. Since this is a privaccy issue, Buyeers’ Industry M
Members sho
ould not provide such letters to the
e Seller’s Indu
ustry Member without thee written conssent of their B
Buyers. It is o have their In
ndustry Member amend thhe financing cclause in a counter offer to
o require appropriate ffor a Seller to
tthat such a le
etter be provided if they arre going to want or need tthis level of assurance beyyond what thee standard clau
use provides. In the case off a financing cclause havingg been stricke
en in an agreeement, a Selleer may wish to request pro
oof of ffinancial capaability from th
he Buyer’s fin
nancial institu
ution as a conndition of the agreement. If a financing condition in an agreemen
nt is not met, the required written noticce does not h
have to be in tthe form om a financiall institution u
under the stan
ndard financi ng clause. Su
uch a letter is required only if the of a letter fro
agreement exxplicitly state
ed that this waas the type of notice requ ired. 6 PCDS 3. TThe spaces provided in the
e standard fo
orm are for ho
ours (examplee 24 or 48) fo
or both the tim
ming of providing the PCDS to the B
Buyer and forr the Buyer to
o review the P
PCDS and be ddeemed satissfied with it. Industry Mem
mbers may find it eaasier to track by crossing o
out the “withiin” and the “hhours” and in
nserting “by June 10, 2012” and “June 17, 201
12”or whatevver the appropriate dates aare. This latteer date often
n correspondss with the datte the other main co
onditions of ffinancing, insp
pection and insurance aree due to be met, to reducee the number of different deadlines to be kkept track of.
If the listing ssheet specifie
es that no PCD
DS is available
e, a Buyer’s Inndustry Mem
mber should exxplain this to the Buyer and the Buyer may still request aa PCDS, depending on the circumstancees. It is up to
o the listing In
ndustry delete this clause in a coun
nter offer if it is requested in the offer aand one is not available. Member to d
CLOSING DA
ATE 4. TThe date on w
which the Buyyer is to receive title to the
e property annd the Purchaase Price is to
o be paid is to
o the SSeller is the cclosing date. A specific datte, month and
d year are to be filled in th
he spaces pro
ovided to ensure certainty with
hin the contraact. Care must be taken to
o ensure the Buyer(s) choose a weekdaay that is not a holiday so that lawyers wiill be available
e to facilitate
e the closing. Fridays (or TThursdays beffore a Friday h
holiday) are also less d
desirable cho
oices for closin
ng dates since
e, if an issue ddelays the clo
osing, it is dellayed for threee days instead of jusst one. 7 TThe blank secction of this cclause is mean
nt to be used when vacantt possession w
will not be givven on closing day, as in the case off a tenant who is staying o
on or in the caase of the posssession datee being earlierr or later than
n the closing date. In these case
es, reference to a more de
etailed clausee in an append
ded schedulee is required. A simple, “posssession to be 2 weeks afteer closing” is iinsufficient a nd leaves maany unanswerred issues thaat have tto be addresssed. In typiccal deals where no tenantss are involvedd and possesssion and closiing occur on tthe same day, this secttion should be
e left blank. TThe “empty b
by” space sho
ould be filled in with a speccific time on tthe closing daay that is earlly enough to accommodatte when the B
Buyer would like to do their pre‐close w
walkthrough. Common tim
mes filled in here are 9 am and 12 no
oon. Do not ffill in noon he
ere if your Buyyers are goin g to want to do the walkth
hrough in thee morning. CONVEYANC
CE 5. TThe space pro
ovided is to d
describe the type of deed b
being requestted. This is generally a “W
Warranty” deeed for new construcction, resale h
homes and vaacant land. The type of deeed can be lefft blank and tthe word deed crossed out aand initialled in the margin
n if the purchaase is for a m
mobile or mini‐home and th
he words “bill of sale” can be writte
en in. TTAX VERIFIC
CATION 6. TThe day, mon
nth and year ffor the date b
by which the Buyer is to reeceive the pro
operty tax staatement is filled in here as well aas the day, month and yeaar by which th
he Buyer is deeemed to be ssatisfied with
h it. This latteer date often corresp
ponds with th
he date the otther main con
nditions of finnancing, inspeection and inssurance are d
due to be met, to reducce the numbe
er of differentt deadlines to
o be kept tracck of. 8 DAMAGE PR
RIOR TO CLO
OSING 7. TThis clause sp
pecifies that tthe risk of loss or damage to the properrty lies with tthe Seller until the Purchase Pricce is paid. Although the Bu
uyer will be re
equired to obbtain insurancce coverage p
prior to the lending institution releasing mortggage funds, th
he Seller shou
uld be advise d by the Selleer’s Industry M
Member not to cancel its insu
urance coverage until the sale proceeds are receive d. The overlaap of coveragee will ensure that any loss in the inttervening perriod will be co
overed by at least one insuurance compaany. This clau
use also makees it clear that the
e Buyer has th
he right to pro
oceed (and re
eceive the inssurance proceeeds) or to teerminate and have ttheir deposit returned if th
he property iss significantlyy damaged beefore closing. This clause does not app
ply to ms as Clause 7
7. in the Resale Condominium Agreemeent Form 4022 addresses th
he issue as it aapplies condominium
tto condominiiums. A
ADJUSTMEN
NTS 8. A
Adjustments are financial charges mad
de or credits ggiven to the pparties in ordeer to approprriately proratee costs tthat have acccrued or been
n prepaid beyyond the closiing date betw
ween the Buyeer and Seller.. If a cost wass prepaid by the Seller and covers a period beyon
nd the closingg date, then aa charge will b
be made to th
he Buyer (and
d credit tto the Seller) to transfer th
he portion off this cost that related to thhe period after closing to the Buyer. The most common of these is prope
erty taxes, followed by fue
el oil and equiipment lease costs. (The rresale condom
minium dresses adjusttments speciffic to condom
miniums, such as monthly ccommon expeense fees (condo schedule add
ffees), special assessmentss, etc.) Industry Members sshould explaiin the adjustm
ment processs to their clien
nts so tthey are not surprised by any charges tthat show up at closing tim
me when theyy meet with their lawyer. Special care should b
be taken to ad
ddress any un
nbilled assesssments for co mpleted worrk as well. This clause makkes the default positiion for betterrments to be the financial responsibilityy of the Sellerr, so if the inttent is for thee Buyer tto pay for or share in such
h costs, this sh
hould be addressed in a sppecific clause. 9 HST 9. TThe industry person repre
esenting the B
Buyer needs tto check the aappropriate b
box based on what the HSTT status w
was reported
d as in the listting, if it is an MLS® listing.. This should be based on what the Seller states thee status is, if the purchase is for a p
private sale. Most resale h
homes are exxempt from H
HST so this is tthe box most commonly ch
hecked. In other case, care
e must be takken to ensuree the correct b
box is checkeed and that th
he purchase pricce on page 1 is consistent with the HST being includeed or not. GENERAL 10. 10 (a)
(b)
(c)
(d)
(e)
(f)
eposit(s) portiion, paymentt for the sale m
must be provvided by the B
Buyer’s lawyeer to the Other than the de
Seller’s lawyer as a solicitor’s trust cheque.
Self‐e
explanatory, tties into seco
ond part of Claause 4 on pagge 1. Sellers can be held
d responsible
e beyond the closing date ffor representtations made in the agreem
ment. This iincludes any representatio
ons made in tthe PCDS sincce it is consideered part of tthe agreemen
nt. Signaatures made o
outside of allo
owed time fraames are nott valid unless time frame eextensions aree in writin
ng and ratifie
ed by all partie
es. Self e
explanatory, n
no verbal “sid
de deals” are valid. This cconfirms thatt parties do not necessarilyy have to signn original doccuments only,, nor do they have to sign iin person. PERMISSION
N TO PROVIDE INFORMATION FOR REPORTING
G, APPRAISA
AL AND STATTISTICAL PURPOSES 11. TThis clause co
onfirms the Seller’s permisssion for information relatting to a sale of an MLS® listed propertyy to be retained and disclosed. Th
his clause sho
ould not be sttruck (or deleeted as part o
of a counter o
offer by a Selleer) since NSAR/AVREB
B’s MLS® Rules & Regulatio
ons require th
hat such inforrmation be made availablee. 11 A
ADDITIONA
AL TERMS AN
ND CONDITIO
ONS 12. TThis section sshould be use
ed for additional clauses if there is suffi cient room but is more co
ommonly used
d to cross referen
nce additionall schedules off clauses, as ffollows: “Schedule A –
– General” atttached heretto and formin
ng part of thiss agreement” It is very important to list all such sched
dules here, unless they weere already crross referenced in the begginning (Agreement o
of Purchase aand Sale Schedules) section
n where “Othher” was checcked off). Theese must be cclearly cross referen
nced by their ttitle, so that aanyone reading the main pparts of the aagreement kn
nows what additional schedules to look for. Che
eck the name
es of schedule
es and be suree the references to them in this section
n agree completely. Referring to aan SOBP sche
edule as “Sche
edule A” in itss title but calling it “Sched
dule B” here, iis incorrect and
d will create u
unnecessary cconfusion. No
ot completingg this section fully and acccurately can leead to tthe problem of one or mo
ore pages of schedules bein
ng missed by a lawyer, len
nder, etc. Dep
pending on w
what is contained in these schedu
ules, this could have seriou
us implicationns for the Buyyers, Sellers and their Indu
ustry or example, iff a schedule ccontained a clause about aa “cash‐back to Buyer upo
on closing “ and this Members. Fo
schedule wass inadvertently left out wh
hen it was sen
nt to the lend er, it could ap
ppear that the Industry Member w
was encouragging mortgagge fraud again
nst the lenderr. LAWYERS’ A
APPROVAL 13. 12 TThis clause is a very imporrtant one to b
both the partiies and their Industry Mem
mbers. The d
day, month an
nd year ffilled in here must be such
h that it allow
ws for a reason
nable amounnt of time for the Buyer’s laawyer to com
mplete ttheir review. If the Buyer does not yet have a lawye
er, they may rrequire moree days allowan
nce here than
n one w
who does havve a lawyer already in placce. Keep in m
mind that thiss date is also applicable to
o the Seller’s lawyer’s review so maaking this unn
necessarily lon
ng could workk to the Buyeer’s detrimentt since this is one of the on
nly clauses in the
e standard aggreement which allows for a Seller to teerminate an aagreement, w
while the Buyeer has several otherr potential “outs”. A
AGENCY RELLATIONSHIP
P 14. TThis clause is perhaps the most poorly completed off all clauses inn our standarrd agreementts, indicating that tthere is still m
misunderstanding surrounding agency, customer staatus and transsaction brokeerage issues. These are serious isssues and enssuring that yo
ou and your cllient understaand your relaationship and have it accurrately documented is very imporrtant. The varrious parts off this section sshould be com
mpleted as fo
ollows: If two Industrry Members ffrom two diffferent brokerages are reprresenting the Seller and Bu
uyer respectivvely, or if ttwo differentt Industry Me
embers from tthe same brokerage whichh is a designatted agency brokerage are representing the Seller and Buyer respectively, the ““does” box shhould be checcked in both sections a and b and tthe names off brokerages aand Industry Members sho
ould be filled in accordingly, to show th
hat each partyy has agency (client) representaation. Section
n c is left blan
nk in this casee. ent Industry M
Members from
m a common law brokeragge represent tthe Buyer and
d Seller respeectively, If two differe
or if the same
e Industry Me
ember, from either type of brokerage, represents bo
oth the Buyer and the Seller, then tthere are two
o distinct situations which might apply: 
The Industry Mem
mber(s) has (h
have) entered
d into a trans action brokerrage arrangem
ment and is (are) acting as a facilitator(s), then sections a and
d b are to be lleft blank and
d only section
n c will be filleed in with the one apprropriate broke
erage name aand the one oor two Industry Member n
names. 
of the partiess is being treaated as a custtomer and onne is being treeated as a clieent. In this caase, One o
sectio
ons a and b are filled out w
with the brokkerage name aand the Indusstry Member(s) name(s), w
with the “does” box being checked for tthe client party and the “ddoes not” boxx being checkeed for the cusstomer partyy. Section c iss left blank in this case. OR 13 Remember, ““a and b, but not c” or “c, b
but not a and
d b” are the ooptions. With
hin a and b, reemember that “does” is checked for a client relaationship (clie
ent = agency =
= does), “doe s not” is checcked for a cusstomer relatio
onship (customer = n
no agency= does not. When you are in a customer rrelationship w
with a Buyer o
or Seller, you need to tthoroughly exxplain, compllete and have
e signed the aappropriate c ustomer status acknowled
dgement form
m (110, 111 or 112 w
which are man
ndatory underr NSREC Bylaw
w712.) This ssignificantly rreduces the riisk of a custom
mer complaining later that the
ey did not fully understand
d the nature oof their relatio
onship with yyou. It is advisable to include this form in the do
ocuments sub
bmitted to the
e customer’s lawyer so thaat they are clearly aware o
of the non‐agency rrelationship as well. TTIME FOR A
ACCEPTANCEE 15. TThe time fille
ed in here rep
presents Novaa Scotia (Atlan
ntic – AST or A
ADT) time un
nless expresslyy specified ass otherwise. Iff one or both of the parties are in a different time zoone, then it iss advisable to clearly indicaate AST or ADT next tto the specificc time in addiition to circlin
ng the AM or PM. 14 V
Verbal extenssions of timin
ng will not hold up in courtt so it is necesssary to havee any time exttensions noteed and initialled by A
ALL parties, m
meaning all naamed Buyers and all name d Sellers, nott their Industrry Members.
TThe city or to
own where the Industry Member is locaated when theey prepare th
he agreementt is filled in affter the “Dated at”. If the Industryy Member pre
epares the aggreement in H
Halifax, but emails it to another provincce or country wherre the Buyer ssigns it, Halifaax is filled in b
by the Indust ry Member w
when preparin
ng the form aand the Buyer should be instructed to note the
e city where th
hey are signinng as well. If the Buyer(ss’) Industry M
Member is pre
esent when th
he Buyer signss the offer, th
hen the Buyer(s’) Industry Member may sign as w
witness in the
e space provid
ded. If the Ind
dustry Membber cannot bee present, thee Buyers shou
uld be advised to siggn in the pressence of another person w
who is of the l egal age of m
majority and iss mentally sound. If tthis is not possible, the witness section
n must be leftt blank. If thee bank later reequires witneesses to the signatures, th
he Buyer(s) m
may have to re
e‐sign with a w
witness preseent at a later time. Underr no circumstaances should an Ind
dustry Member sign as a w
witness for a ssignature if thhey were not physically preesent to actu
ually w
witness the signing. A
ACCEPTANC
CE 16. TThis section is completed only if the aggreement is be
eing acceptedd EXACTLY ass is. Verbal exxtensions of ttiming w
will not hold up in court so
o it is necessaary to have an
ny time extennsions noted in writing on the agreemeent and initialled by A
ALL parties, m
meaning all naamed Buyers and all name d Sellers. Ind
dustry Members’ initials DO NOT suffice. TThe city or to
own where the Seller(s) are
e located whe
en they sign tthe agreemen
nt as accepted is filled in aafter the “Dated at”. If the Seller’s Industry Mem
mber receivess the offer in Nova Scotia, but emails itt to another p
province or country where the Selle
er signs it, the
e city or town
n that is filled in is the tow
wn or city wheere the Seller is n they sign it. located when
If the Seller(ss’) Industry Member is present when th
he Seller signss the offer, th
hen the Sellerr(s’) Industry M
Member may sign as w
witness in the
e space provid
ded. If the Ind
dustry Membber cannot bee present, thee Sellers should be advised to siggn in the pressence of another person w
he Seller(s) m
may have to re
e‐sign with a w
witness preseent at a later time. Under no circumstaances should an Ind
ually w
witness the signing. REJECTION 17. 15 TThis section is filled in if th
he Seller is no
ot accepting the offer and is not preparring a counterr offer. The fo
orm allows for the
e notice of rejjection to be timed, dated
d, and signed by either thee Seller or thee brokerage representativve of the Selle
er. For clarityy and transparency, it is prreferable thatt the Seller siggn the rejectiion, rather than the Industry M
Member signing it. COUNTER O
OFFER 18. If the Seller h
has prepared a counter offfer, the date w
which it was pprepared is filled in and th
he Seller(s) siggn where indicated. If this section iss completed, then a completed and sig ned Counter Offer Form 4
410 must acco
ompany tthe agreement when it is ssent back to tthe Buyer’s In
ndustry Mem
mber. ____________
___________
____________
___________
_______________________________________ TThe section aat the bottom
m for Industry Members’ an
nd lawyers’ coontact inform
mation is for rreference onlyy and is not mandatory to be filled
d in. Some Bu
uyers and Sellers do not knnow the name of the lawyyer who will b
be representing them at the ttime they sub
bmit or respo
ond to an offeer. 4
401 Agree
ement of P
Purchase aand Sale Paart II: Resid
dential Sch
hedule TThe propertyy address, Buyyer(s) name(ss) and Seller(ss) name(s) aree to be filled in as they weere in Part I, u
using full address of civvic number, ccomplete stre
eet name and town, city orr county. INSURANCEE 1. Dates that alllow for a reassonable amou
unt of time fo
or the Buyers to get confirmation from their insuran
nce company that the propertty is insurable
e should be in
nserted here. This date should be the ssame or later than the date in the in
nspection clau
use 2(a) since
e insurability issues are oft en discovered upon inspection. Note tthat the Buyer is not o
obtaining insu
urance by the
e date specifie
ed they are juust satisfying themselves b
by that date tthat the property is in
ndeed insurab
ble. 16 INSPECTION
N 2. TThis is one off the most important clausses and is one
e of the Buyerr’s best sourcces of protecttion of their in
nterests. A
As such, an In
ndustry Member representing a Buyer sshould neverr recommend to a Buyer th
hat they delette this dicating clause. If a Buyer does choose to delette it, the Indu
ustry Memberr should havee the Buyer sign a letter ind
tthat they werre advised no
ot to delete th
his clause and
d understand the risks asso
ociated with doing so. Dates that allow for a re
easonable amount of time for Buyers to
o have inspecction(s) perforrmed should be inserted h
here. More amendments are wrritten with reference to th
he above clau se than perhaaps any other but the clau
use and related amen
ndment are often misunde
erstood. Once a Buyerr submits an aamendment ((or other form
m of written nnotice of dissatisfaction) in
ndicating dissatisfaction with inspecction results, and includes a written ins pection repo
ort, the Buyer is “giving nottice” that tthe inspection did not meet their satisffaction. If the Buyer’ss Industry Me
ember does not submit succh an amendm
ment (or otheer form of wrritten notice o
of dissatisfaction) to the Seller’s Industry Member befo
ore the end oof the deadlin
ne day, the inspection clau
use is deemed to be
e met and ne
either Buyer n
nor Seller can terminate thhe deal on thee basis of thiss clause. If the Buyer’ss Industry Me
ember does su
ubmit such an
n amendmennt (or other fo
orm of written
n notice of dissatisfaction) to the Seller’s Industry Member befo
ne day, along with pertinen
nt sections of a written inspe
ection report,, this constitu
utes notice too the contraryy by the Buyer, either Buyeer or SSeller can terrminate the deal on the baasis of this claause. There iss no timeline specified for when the Bu
uyer of SSeller must te
erminate. The termination
n does NOT h
have to be witthin the inspeection deadlin
ne, only the n
notice of tthe Buyer’s d
dissatisfaction
n AND THE PR
ROVISION OF A WRITTEN IN
NSPECTION R
REPORT. However, if aan amendmen
nt (or other fo
orm of writte
en notice of d issatisfaction
n) is prepared and submitteed w
without a written inspection report, then it is debattable how a juudge would in
nterpret the q
question of w
whether e was given. To eliminate
e the risk of a judge ruling tthat notice w
without the reeport constitu
uted NO proper notice
NOTICE, Indu
ustry Memberrs representin
ng Buyers mu
ust ensure thee report is pro
ovided. If the Buyer iss not terminaating at this tiime, the Buye
er will often ppropose a solution to the inspection isssue in the “notice of disssatisfaction” amendment (ALONG WITTH A COPY OFF THE WRITTEEN INSPECTIO
ON REPORT) fo
or the SSeller’s consideration. Th
he Seller can d
do any of the following: endment with
h the propose
ed solution w
within the timeline allowed
d for the amendment  Seller accepts ame
now terminatte the deal onn the basis off this particulaar clause. Insspection itselff. If so, neither party can n
is dee
emed met byy the two partties agreeing to modify thee contract in some way.  Seller rejects the aamendment aand terminates the deal.
17 
Seller rejects the aamendment ((or allows it to time out w ithout respon
nding) but do
oes not termin
nate the deal. The Seller m
may or may no
ot propose a counter ame ndment. At tthis point, eitther party can
n terminate, the deal is “in limbo
o” until a partty decides to propose anotther amendm
ment or terminate. Buyer may still terminate aat this point in time, they hhave NOT forrfeited their rright to terminate by The B
subm
mitting an ame
endment sincce that amend
dment was N
NOT accepted. Continued negotiation d
does not, in itself, waive a te
ermination right. W
WATER/SEP
PTIC 3. TThis clause sh
hould be com
mpleted with aa check mark and cross refferenced with
h a Schedule by inserting tthe schedule title
e such as “ A” or “B”, consiistent with whatever the SSchedule is tittled ONLY IF tthe property has a w
well AND/OR
R a septic system. Both parties initial th
he boxes, in thhis case. If th
he property h
has neither a well nor a septic syste
em (property is on both municipal wate
er service andd municipal seeptic service),, then this claause should be strricken. In thiss case, the bo
oxes are not in
nitialled, but tthe Buyers an
nd Sellers neeed to initial in
n the margin to con
nfirm that the
e clause doess not apply. In
ndustry mem
mbers represeenting Buyers need to allow
w sufficient tim
me for water tests which may take longe
er depending on which tessts are taken and who is do
oing the analysis. 18 FIXTURES/C
CHATTELS/LEEASED EQUIPMENT 4.
(a.) The daate inserted h
here is the lasst date that th
he Buyer(s) vviewed the property. (b.) Chatte
els that the Buyers are req
questing be in
ncluded in thee property are to be listed here. Note tthat this speciffication is neccessary regard
dless of what was listed ass being includ
ded by the Sellers in the lissting inform
mation. Altho
ough, legally, fixtures are aautomaticallyy included unlless specificallly excluded, it is advisaable to list here any fixture
es that that m
might be contrroversial in teerms of whether parties in
ntended 19 them to be included or not. Examples include outside play equipment, bathroom mirrors, garage shelving, etc. Where there are differences between the listing information and this clause, this clause prevails since this is a formal agreement and the listing information is not. The “in good working order” portion of the clause may be stricken by the Buyers, if appropriate, or countered by the Sellers. Note that “free of encumbrances” means there are no outstanding loans on any of the items included. If there were and a Seller failed to counter this point, the Seller would be obligated to pay out the loan before closing to comply with the “free and clear” statement. (c.) This clause must be filled out and initialled by all parties regardless of whether there is any leased equipment. If there is no leased equipment, then “Not Applicable – No Equipment Leased” should be inserted. If there is leased equipment , then a clause to indicate clearly what the equipment is, what company the lease is with and what is to be done with it should be inserted. If the equipment is to be assumed by the Buyer then specifics re the monthly cost and reference to another clause that allows the Buyer to review and be satisfied with all the details should be included in the clause as well. Examples: “Buyers to assume the lease for the furnace from Irving Oil at a cost of approximately $80.00 per month plus HST, subject to the Buyer’s review of documentation as per Schedule A” OR “Sellers to fully pay out the furnace lease with Irving Oil, prior to closing and to provide written confirmation of such payout to the Buyer’s Industry Member prior to the pre‐close walkthrough.” 20 PROPERTY M
MIGRATION 5. 21 Industry Mem
mbers drafting an agreeme
ent for Buyers should checck Nova Scotia Property Online to see iff the status of the subject property is “Land Registration”” or “Not Landd Registration
n”. Only if yo
ou have positiively confirmed that the status is “Land Regiistration” Novva Scotia Propperty Online,, should you ccheck (b) and have tthe buyer inittial in the boxx. In this case
e, (a) should b
be left totally y blank with n
no check in the box and no
o initials. TThe clause which is not be
eing used doe
es NOT need tto be strickenn as it is an “eeither/or” situ
uation. If the status on Nova Scottia Property O
Online is “Nott Land Registrration” or if yoou are unablee to confirm o
one way or another because the Property Onliine system is down or you are not able to access it, clause (b) is tto be left totaally blank and (a) is to b
be checked an
nd initialled. TThis clause do
oes not deal o
only with the
e migration isssue; it is also the clause th
hat allows for the Buyer’s lawyer to investigate title and the giives the Buye
er the right to nullify the aggreement if aa valid title ob
bjection is discovered w
which the Seller is unable or unwilling tto remove an
nd which the Buyer is unwilling to waivee. 4
402 Agree
ement of P
Purchase aand Sale Paart II: Cond
dominium Schedule INSURANCEE 1. Dates that alllow for a reassonable amou
unt of time fo
e should be in
nspection Clau
use 2. since in
nsurability isssues are oftenn discovered upon inspecttion. Note thaat the Buyer is not o
obtaining insu
urance by the
e date specifie
ndeed insurab
ble. INSPECTION
N 2. 22 This is one of the most important clauses and is one of the Buyer’s best sources of protection of their interests. As such, an Industry Member representing a Buyer should never recommend to a Buyer that they delete this clause. If a Buyer does choose to delete it, the Industry Member should have the Buyer sign a letter indicating that they were advised not to and understand the risks associated with doing so. Dates that allow for a reasonable amount of time for Buyers to have inspection(s) performed should be inserted here. Note that for a condo purchase, the property covered by this clause is the Unit itself and any storage or parking spaces which are part of the property or are assigned to the unit. It does not cover the integrity of the building; this is addressed in Clause 4. (a) which allows for the Buyers review of the Reserve Fund Study (if applicable). More amendments are written with reference to the above clause than perhaps any other but the clause and related amendment are often misunderstood. Once a Buyer submits an amendment (or other form of written notice of dissatisfaction) indicating dissatisfaction with inspection results, and includes a written inspection report, the Buyer is “giving notice” that the inspection did not meet their satisfaction. If the Buyer’s Industry Member does not submit such an amendment (or other form of written notice of dissatisfaction) to the Seller’s Industry Member before the end of the deadline day, the inspection clause is deemed to be met and neither Buyer nor Seller can terminate the deal on the basis of this clause. If the Buyer’s Industry Member does submit such an amendment (or other form of written notice of dissatisfaction) to the Seller’s Industry Member before the end of the deadline day, along with pertinent sections of a written inspection report, this constitutes notice to the contrary by the Buyer, either Buyer or Seller can terminate the deal on the basis of this clause. There is no timeline specified for when the Buyer of Seller must terminate. The termination does NOT have to be within the inspection deadline, only the notice of the Buyer’s dissatisfaction AND THE PROVISION OF A WRITTEN INSPECTION REPORT. However, if an amendment (or other form of written notice of dissatisfaction) is prepared and submitted without a written inspection report, then it is debatable how a judge would interpret the question of whether proper notice was given. To eliminate the risk of a judge ruling that notice without the report constituted NO NOTICE, Industry Members representing Buyers must ensure the report is provided. If the Buyer is not terminating at this time, the Buyer will often propose a solution to the inspection issue in the “notice of dissatisfaction” amendment (ALONG WITH A COPY OF THE WRITTEN INSPECTION REPORT) for the Seller’s consideration. The Seller can do any of the following:  Seller accepts amendment with the proposed solution within the timeline allowed for the amendment itself. If so, neither party can now terminate the deal on the basis of this particular clause. Inspection is deemed met by the two parties agreeing to modify the contract in some way.  Seller rejects the amendment and terminates the deal.  Seller rejects the amendment (or allows it to time out without responding) but does not terminate the deal. The Seller may or may not propose a counter amendment. At this point, either party can terminate, the deal is “in limbo” until a party decides to propose another amendment or terminate. The Buyer may still terminate at this point in time, they have NOT forfeited their right to terminate by submitting an amendment since that amendment was NOT accepted. Continued negotiation does not, in itself, waive a termination right. 23 FIXTURES/C
(a.) The d
date inserted here is the laast date that tthe Buyer(s) vviewed the property. Buyers are requesting be included in thhe property are to be listed
d here. Note that this (b.) Chatttels that the B
speciification is necessary regarrdless of what was listed aas being included by the Seellers in the liisting information. Although, legally,, fixtures are automaticallyy included un
nless specificaally excluded,, it is advissable to list he
ere any fixturres that that m
might be conttroversial in tterms of whether parties intended them
m to be included or not. Th
here are fewe
er of such item
ms for condominiums but may include things like b
bathroom mirrrors, closet shelving, etc. Where theree are differences between the listing information and this clause, this clause prevvails since thi s is a formal aagreement an
nd the listing information is nott. The “in goo
od working orrder” portion of the clausee may be striccken by the B
Buyers, if appro
opriate, or co
ountered by the Sellers. Note that “freee of encumbrrances” mean
ns there are n
no outsttanding loanss on any of the items includ
ded. If there were and a SSeller failed to
o counter thiss point, the SSeller would b
be obligated tto pay out the
e loan before closing to co
omply with the “free and cclear” state
ement. 24 (c.) This cclause must b
be filled out aand initialled b
by all parties regardless off whether theere is any leassed equip
pment. If the
ere is no lease
ed equipmentt, then “Not A
Applicable – N
No Equipmen
nt Leased” sh
hould be inserrted. If there is leased equ
uipment, then
n a clause to i ndicate clearrly what the eequipment is, what comp
pany the lease is with and what is to be
e done with thhe equipment lease should be inserted
d. Exam
mples: “Buyyers to assume the lease fo
or the electricc hot water hheater from SSears at a cosst of approxiimately $14.0
00 per month
h plus HST, su
ubject to the B
Buyer’s revieew of documeentation as peer Schedule A
A” OR ers to fully pa
ay out the eleectric hot water heater froom Sears, priior to closing,, and to provvide “Selle
writtten confirmattion of the pa
ayout to the B
Buyer’s Indusstry Member prior to the p
pre‐close walkkthrough.” 25 DOCUMENT
TATION 4. A
Although the
ere are no blanks to complete in this claause, it is onee of the most important claauses in a condominium
m agreement and should b
be reviewed in
n detail with both the Buyyer and the Seeller, by their respective Industry Memb
bers. Both (a)) and (b) allow
w for the Buyyer to nullify tthe agreemen
nt if not satisffied with tthe documen
nts provided sso it is critical that both paarties understtand the impo
ortance of pro
oviding and rreviewing tthe documen
nts within the timeframes allowed. Unllike most otheer conditionss where the deadlines are specified w
when the offer is drafted, these clauses contain stan
ndard time peeriods so the Industry Members must eensure tthat the partiies are aware
e of the relate
ed deadline dates. (a) This clau
use requires the Seller to p
provide certain documentss to the Buyerr within 5 dayys of acceptan
nce and the Buyer has 5 days aafter receipt tthereof to ob
bject in writingg. The docum
ments should be obtained by the listing Ind
dustry Memb
ber at the time
e the condom
minium is listeed to preventt unnecessaryy delays in thee process once an aagreement is in place. If th
hey have not been obtaineed in advancee, there is a h
higher chancee of not being ablle to provide them to the B
Buyer within the 5 day deaadline. The In
ndustry Mem
mber represen
nting the Buyer mu
ust be carefull not to give aadvice beyond
d their experttise in answering question
ns about the documen
nts and should
d refer the Bu
uyer to a lawyyer (declaratiion, bylaws), accountant (ffinancial stateements, budgets) or engineer ((reserve fund
d study) as req
quired. 26 (b) The provision and review of the esttoppel certificate is generaally handled b
by the lawyerrs for the tran
nsaction and this iis the last piece of docume
entation to be
e provided annd reviewed. Sellers should be made aware in advance of the cost off providing th
he certificate ssince it is theeir responsibillity and an aggreement cannot close without one. Th
he importancce of ensuringg that all conddominium feees are paid up
p to date befo
ore the hould be emp
phasized to thhe Seller both
h early in the llisting processs and estoppel certificate is requested sh
ented. Both Buyers and Seellers need to
o be made fully aware that the again at tthe time and offer is prese
Buyer has the right to declare the aagreement nu
ull and void a nd have theirr deposit retu
urned if the B
Buyer is not satisffied with the certificate an
nd the Seller is notified of tthis in writingg within 5 dayys of the Buyeer receivingg it. The fact tthat a condo sale transaction is at risk oof falling up u
until very closse to the closiing date is a conce
ern that both Buyers and SSellers should
d be made coggnizant of. Lo
onger closingg periods carrry an increased
d risk due to tthe larger win
ndow of oppo
ortunity for thhe financial siituations of b
both the seller and the condominium corporaation to changge. PROPERTY M
n”. Only if yo
e, (a) should b
be left totallyy blank with n
eing used doe
uation. If the status Online is “Nott Land Registrration” or if yoou are unablee to confirm o
one way or another on Nova Scottia Property O
because the Property Onliine system is down or you are not able to access it, clause (b) is tto be left totaally blank and (a) is to b
be checked an
oes not deal o
only with the
er has the righ
ht to nullify thhe agreementt if a valid title objection iss discovered w
which the Selle
er is unable o
or unwilling to
o remove andd which the Buyer is unwillling to waive.. CONVEYANC
CE 6. (a) This clause explaiins that conve
eyance is subject to condoominium legisslation and co
onfirms that u
utility ments, etc. exxist and that the Buyer will accept title subject to su
uch easementts. easem
28 (b) It is vvery importan
nt for the Buyyer to read an
nd fully underrstand this claause since it cconfirms the signifficant financiaal risks associiated with condominium oownership. DAMAGE 7
7. TThis clause sp
pecifies that tthe risk of loss or damage to the unit annd equipment therein lies with the Seller until closing. Altho
ough the Buyyer will be req
quired to obtaain insurancee coverage on
n the unit prio
or to the lending institution releasing mortggage funds, th
he Seller shou
overed by at least one insuurance compaany. The condominium corporation aalso has a Maaster Policy th
hat covers the
e common eleements. Sub clauses (a) an
nd (b) make it clear tthat the Buye
er has the righ
ht to proceed
d (and get the
e insurance prroceeds) or teerminate and
d have their d
deposit returned if th
he property iss significantly damaged before closing.
29 A
ADJUSTMEN
NTS/REPRESSENTATIONSS 8. 9. 10. 11. A
ween the Buyeer and Seller.. General adjustments are addressed in Clause 8. of Part I and
d adjustmentss specific to ccondominium
ms are addresssed here. Monthly com
mmon expense
e fees (condo
o fees) are generally prepaaid by the Selller and coverr a period beyyond the closing date, unless the clo
osing date fallls exactly at tthe end of a m
month. If clo
osing date is n
not at a month end, a charge will be
e made to the
e Buyer (and an equal cred
dit given to thhe Seller) to ttransfer the p
portion of thiss monthly fee tthat relates to
o the period aafter closing, to the Buyerr. Industry M
Members shou
uld explain th
his process to their Buyers so they are not surprised byy this charge w
when they meeet with theirr lawyer and review ttheir stateme
ent of adjustm
ments. Clause 9. con
nfirms that an
ny deficiency ((negative balaance) in speccial funds musst be eliminatted by being paid out by the Seller before closing but that an
ny credit (posiitive) balancee in such fund
ds is transferred to the Buyyer, e in the agree
ement. unless specifiically addresssed otherwise
Clause 10. prrovides for th
he Buyer to sttate the legal detailed desccription of the property so
o that it can b
be mation shoulld be obtained/confirmed by the confirmed byy the Seller up
pon acceptance of the offe
er. This inform
Industry Mem
mber preparin
ng the offer b
by looking up the informattion on Nova Scotia Properrty Online. N
Note that tthe parking u
unit number iss only inserte
ed here if the parking unit is deeded. Iff that is the caase, the parkiing unit w
will also have
e a separate P
Property Identification Num
mber (PID) asssociated with
h it which sho
ould be includ
ded on page 1 of Parrt I along with
h the PID of th
he condo unitt. 30 Clause 11. (a..) and (b.) pro
ovide for the Buyer to state the currentt monthly feee amount and
d the number of and identification
n number of aany assigned p
parking and/o
or storage spaaces so that tthese details can be officiaally confirmed byy the Seller up
pon acceptance of the offe
er. “N/A” shoould be writtten into any space as appro
opriate rather than le
eaving the spaces blank. If the specificss are unknow
wn, the Industtry Member d
drafting the o
offer should speciffy (in a separaate clause add
ded to the ad
ddendum) thaat the Seller sshall provide tthe details. Clause 11. (c..) and (d.) state that the Se
eller warrantss that they haave not receivved notice co
ontaining certain information rregarding the
e legal and financial status of the corporration. It is critical that th
he Seller’s Industry Member reviews these claauses in detaiil with the Seller and ensu res that if anyy of these staatements are NOT ttrue, the Selle
er cannot acccept the offerr as written and must advi se, in a countter offer, the details of how
w these statements are not true. Note the worrding is “special assessmennts contemplaated by the C
Condominium
m 31 Corporation”” , which means that such aassessments do not have tto have been
n billed, or eveen approved yet at a meeting, in o
order for the SSeller to be obligated to diisclose the “ccontemplation
n” thereof to the Buyer. FFurther, even if such sstatements arre true at the
e time of acce
eptance or co unter offer (i.e. no noticess received to date), Clause (d.) (iii) provides th
hat the Sellerr agrees to no
otify the Buyeer in writing iff and when an
ny such notices are ween that tim
me and the clo
osing date. B
Both Buyers a nd Sellers need to be mad
de fully awaree that the received betw
Buyer has the
e right to declare the agreement null an
nd void and hhave their dep
posit returned if such notice is received. Th
his essentiallyy means for a condo sale trransaction wiith this clausee in place can
nnot really eveer be completely “ffirm”, in advaance of closing. 4
403 Agree
ement of P
Purchase aand Sale Fo
or Turn Keyy New Con
nstruction (House an
nd Land) TThis form sho
ould be used for the purch
hase of any ne
ewly residenttial property b
being sold “Turn Key”. This means a property th
hat is being bu
uilt by a builder who also o
owns the landd and who is selling the co
omplete finish
hed package of ho
ouse and land
d to the buye
er. This form is designed sppecifically forr new constru
uction homess for w
which the building process has not yet begun but is also approprriate for Turn Key homes tthat are in varrious stages of com
mpletion. Cerrtain standard
d clauses will not be appliccable, depend
ding on the sttage of completion and additionaal clauses may need to be added in certtain cases. A
As always, usse your professsional judgement, commo
on sense andd keep the neeeds and interrests of your cclient at tthe forefrontt when determ
mining what cclauses may n
need to be addded. For exaample, a standard inspectiion clause (like Fo
orm 401‐Clau
use 2.) further protects the
e Buyer’s inteerests if the home is alread
dy complete o
or substantially complete. Any such clausses can be added by using an Addendum
m Form 420. Since this Fo
orm does on for cross‐rreferencing ad
dditional stanndard form scchedules, be ssure to insertt a cross not currentlyy have a sectio
referencing cclause somew
where in the b
body of the aggreement if a ny additionall standard forrm schedules are used to ensure that the exxistence of alll schedules is known to alll parties. Thee blank space below Clausee 7. on page 2. provides enough sspace to inserrt something like the follow
wing examplee: ment is further subject to SSchedule “A” on Form 420 re Inspection
n and Schedule “B” re Salee of “This Agreem
Buyer’s Prope
erty on Form 430A.” (Note that cross rreferencing suuch schedules as part of C
Clause 15. is not appropriate ssince specific review and n
notice condition preamble in Clause 15. would not b
be applicable.) TThe Buyer(s) legal name(s) should be filled in, using their full legaal name(s). M
Make sure you
u discuss with
h the Buyer(s) who
ose name(s) th
hey wish to h
have on the offfer. If both ppersons in a ccouple are go
oing to be required to be involved in
n securing mo
ortgage finan
ncing for the p
property beinng purchased,, then both names should also be on the offer. Otherwise, aan amendment may be req
quired later t o add the seccond name ass a Buyer. If tthe 32 Buyer is a corporation, then you must ensure that the individual you are working with has the signing authority to legally bind the corporation. NOTE: Since FINTRAC Client Identification Forms for Buyers are generally completed at the time an offer is written, you should have the legal names documented and verified at this point, as well as having the signing authority confirmed for a corporation. The Seller(s) name should be written as displayed on the listing sheet and on the Nova Scotia Property Online property search page. If there is a discrepancy between these two sources, check with the listing Industry Member for the correct spelling, etc. If the property owner is showing as only one person on Nova Scotia Property Online, but the listing sheet shows two names as the Sellers, use both names on the contract as it is likely a matrimonial property situation. If the listing shows a builder’s name and property online shows a different builder’s name or a developer’s name, you will need to obtain confirmation, in writing, that the Seller, as listed on the listing sheet, does indeed have an option to purchase the specific lot in question. If this is not obtainable at the time the offer is written, or if there is any question with regard to whether the parties are correctly named, specifically requesting that the lawyer check into this during their review of the contract is a good practice. The listing brokerage should be filled in as the full legal business name of the brokerage which has the property listed and is representing the Seller as a client. If the listing is a mere posting, the listing brokerage space should be left blank since the sale is not being done “through the brokerage” and the Seller is not being represented. The co‐operating brokerage name is filled in ONLY if the brokerage representing the Buyer (your brokerage) is NOT the listing brokerage representing the Seller. If the brokerage you work for is the listing brokerage, and you are representing the Buyer through designated agency, or you are writing the offer under transaction brokerage or you are writing the offer with the Buyer as a customer, do NOT fill in the cooperating brokerage space. There is only a co‐operating brokerage if a second separate brokerage, other than the listing brokerage representing the Seller, is involved. Otherwise, this space should be left blank. Lot number, Subdivision Name (if applicable), Street Name, City or Town, and PID (Parcel Identification Number) and County should all be confirmed using a Nova Scotia Property Online search and filled in completely and accurately. Lot numbers are particularly important when dealing with new construction since the civic addresses may not be available until later in the process. As a result, the Lot number is often the number most commonly used by the builder and their Industry Representative. The purchase price must be written both in words and in numbers in the space provided. The purchase price is the amount that will “change hands” on closing day, which is the pre‐tax price plus 15% HST less any HST Federal rebate (since this rebate automatically gets assigned to the builder.) Confirm that the list price (and therefore and purchase price) does include the HST with the Federal HST rebate assigned to the Seller/Builder. Ensure the purchase price above the solid line agrees exactly with Line (A) directly below. WEBForms® does not automatically link these two fields, so be sure to change both fields to the new updated value if making a change to the purchase price, upon making a second or third offer. 33 Line (A) is to be completed
d with the sam
me dollar value as noted aabove being m
manually enteered. The rem
mainder e lines (B) thrrough (E), will calculate andd populate au
utomatically, if using WEB
BForms®. of the dollar vvalues for the
If not using W
WEBForms®, tthese values m
may be calcullated and enttered manuallly following tthe detailed instructions p
provided. All values should be double aand triple cheecked for accu
uracy and reaasonableness, w
whether usin
ng WEBForms® or completing the form manually. Alll amounts sh
hall include tw
wo decimal places; do NOT round vaalues to the n
nearest dollarr. Explaining this form to your Buyer client can be intimidating aand many Buyers will be
e interested o
only in Line (A
A), the amoun
nt of money tthat will actuaally “change hands”. Howeever, it is important that any Industry Member re
epresenting aa Buyer or Se ller in a new construction property purrchase understand the taxation aand rebating p
process, and h
how it affectss the way we price new co
onstruction properties. TThis will ensurre that you arre able to exp
plain this to thhose Buyers w
who do want to understan
nd the ffull calculatio
on. The NSAR
R CPE course o
on HST may b
be used as an additional reesource to inccrease your understandin
ng of this tech
hnical aspect of new construction sales pricing. 34 REBATES 1. Federal Portion of H
HST Rebate W
Whether the Buyer qualifiies for the Federal portion of the HST m
must be deterrmined and th
he appropriatte box checked. Since the net pu
urchase price is calculated under the asssumption thaat the Buyer D
DOES qualify for this hat the rebate
e WILL be auttomatically asssigned to thee Seller, if thee Buyer does NOT qualify aand (b) is rebate and th
checked, both Industry Members mustt ensure that the purchasee price is correected accordingly. If the B
Buyer does not qualify, the Industry Memberr representingg the Buyer shhould have co
onfirmed thiss status early in the buying process and clearlyy advised the Buyer on the
e impact on thhe price theyy will pay for aa newly consttructed home. 2. Nova Scotia First Tim
me Home Bu
uyers Rebatte This rebaate is no longe
er handled byy Canada Revenue Agency and is no lon
nger assignab
ble to the Selleer. Initiallingg of this clause is simply to have all partties acknowleedge that theyy are aware o
of this fact. 35 3. This clausse confirms th
hat the Buyerr understandss that the rebbate amount will change iff the purchase price changes, that the Buyer will reimbu
urse the Selle
er for any reb ate they weree credited for which is lateer found er not qualifyiing, and that the Buyer wiill complete the to be unccollectible by the seller due to the Buye
necessaryy paperwork for the assign
nment of rebaate, as agreedd to in 1 (a).
DEPOSIT 4. It should be n
noted that a d
deposit is nott required to make the conntract legally binding, but most Sellers w
will expect to see
e a deposit as a sign of goo
od faith. The amount of thhe deposit being submitted
d by the Buyeer must be written bo
oth in words aand in numbe
ers in the space provided. 36 A
A Buyer’s Ind
dustry Membe
er should alw
ways identify tthe means of deposit (cash
h, cheque or bank draft) in
n the agreement byy circling the correct word
d or writing it in, and if thee agreement is accepted, then the brokerage has agreed to
o that method
d of deposit. If a brokeragge has a “no ccash deposit”” policy or “ceertified chequ
ue only” policy in place, this should
d be listed cle
early in the insstructions to REALTORS® ssection of thee listing sheett. This w
will prevent tthe problems that occur w
when the depo
osit method i s not specifieed and the meethod turns o
out to be unacceptable
e to the broke
erage. It is standard practice in N
Nova Scotia fo
or the listing b
brokerage to hold the deposit and the N
NSAR standarrd form indicates thiss. However, tthe question o
of who (which brokerage, which lawyer) holds the d
deposits is a m
matter of negotiation b
between the p
parties. If the
e Buyer wishe
es the depositt to be held b
by their lawyeer, then this cclause must be man
nually modifie
ed accordinglyy to reflect th
his. As with a ny changes, eensure that all Buyer and SSeller parties initial the change. e in the “...on
n or before__
_____” phrasee with a speciific date such
h as “July 30, 2
2011” so It is best to fill in the space
tthat all partie
es are clear on when the deposit is due. The phrase “upon accep
ptance” is imp
possible to acchieve unless the Bu
uyer’s Industrry Member haas the cheque
e in hand andd is present w
when their clieent’s offer is presented to the Sellers, rready to immediately hand
d over the cheeque. The ph
hrase “within
n 48 hours of a
acceptance” or “within 2 days of accep
ptance” can aalso be probleematic since the deadline is now tied in
nto e and is thereffore less clear than just providing a speecific date refference. another date
If a second de
eposit is involved, a separaate clause maay be added uunder section
n 12. A comm
mon practice, especially in tthe case of a second or “sttepped‐up” d
deposit is for tthe Buyer’s In
ndustry Mem
mber to use th
he phrase “when all con
nditions are m
met” as a dep
posit deadline
e. This is pro blematic sincce there are some conditio
ons that are not met u
until closing d
date, such as a satisfactoryy pre‐close waalkthrough. The Buyers aand their Indu
ustry Member ofte
en mean “whe
en insurance,, inspection a
and financingg conditions”” when they u
use this phrase but should insteaad specify thiss by saying “tthe same dayy that the insppection condiition is to be met” or, even better, provide the sspecific date rreference as ssuggested above. W
When using aa specific date
e reference, Industry Mem
mbers should take into acccount the time which nego
otiations might take an
nd must reme
ember to adju
ust for the de
eposit timing in subsequen
nt offers if thee negotiation period spans several days. Similaarly, if a re‐w
written offer iss received witth a deposit d
due date thatt has already passed due to an ove
ersight by the
e Buyer’s Indu
ustry Member, the Seller’ss Industry Meember should adjust this date in tthe counter o
offer response or have it changed and rratified by all parties in thee agreement.. FINANCING 5. TThe principal amount OR p
percentage (b
but not both) inserted herre should refleect the maxim
mum mortgagge ffinancing that the Buyer m
may need. Th
he percentage
e is more com
mmonly used tthan the amo
ount since thiis is less 37 likely to need
d to be modified if the purchase price changes durinng negotiation
ns, but either method is acceptable. TThe interest rrate filled in sshould be the maximum raate the Buyerr would be willing to accep
pt on a mortgage. It has become common in rrecent years ffor Industry M
Members to fiill in “suitablee” for both th
he amount and rate. This praactice gives th
he Buyer a disstinct advant age over fillin
ng in specific amounts as itt leaves he Buyer to de
eem any amo
ount of financcing at any intterest rate to
o be “unsuitab
ble”. Howeveer, this it open for th
practice may also result in
n an agreement being deem
med unenfor ceable due to
o lack of certaainty so this p
practice is not advised
d. As a Sellerr’s Industry M
Member, it is aadvisable to ccounter on th
his point and require moree specific details. Be aw
ware that if u
using Part 1 in
n conjunction with Form 4006 for a mobile or mini‐ho
ome purchasee, the ffinancing requirements may be different. SSellers’ Indusstry Memberss often request financing cconfirmation letters from B
Buyers’ Indusstry Memberss even tthough the sttandard form
m clause does not require itt. Sometimess this is at thee request of tthe Seller or ttheir banker if theyy are purchassing another p
property but often it is jusst habit on thee part of the listing Industtry Member. Th
he standard fiinancing apprroval clause iss written suchh that financiing is deemed
d to be met unless notice to the contrary is re
eceived in wrriting. Since this is a privaccy issue, Buyeers’ Industry M
Members sho
ould not provide such letters to the
e Seller’s Indu
ustry Member without thee written conssent of their B
Buyers. It is appropriate ffor a Seller to
o have their In
ndustry Member amend thhe financing cclause in a counter offer to
o require tthat such a le
etter be provided if they arre going to want or need tthis level of assurance beyyond what thee standard clau
use provides. In the case off a financing cclause havingg been stricke
en in an agreeement, a Selleer may wish to request pro
oof of ffinancial capaability from th
he Buyer’s fin
nancial institu
ution as a conndition of the agreement. If a financing condition in an agreemen
nt is not met, the required written noticce does not h
have to be in tthe form of a letter fro
om a financiall institution u
under the stan
ndard financi ng clause. Su
uch a letter is required only if the agreement exxplicitly state
ed that this waas the type of notice requ ired. INSURANCEE 6. Dates that alllow for a reassonable amou
unt of time fo
e should be in
nserted here. This date should be the ssame or later than the nspection clau
use (if an insp
pection clause
e is being use d) since insurrability issuess are often disscovered date in the in
upon inspection. Note thaat the Buyer iis not obtaining insurance by the date sspecified theyy are just satiisfying tthemselves b
by that date th
hat the prope
erty is indeed insurable. SSITE INSPEC
CTION 7. 38 TThis clause alllows for the Buyer to visitt the propertyy to inspect thhe work with such visits beeing subject tto any stipulations o
of the Seller’ss insurer. The
e Buyer should be cautioneed to balancee their desire to visit the prroperty w
with considerration of limitting the interruptions to th
he Seller’s woork. Insertingg a clause in tthe agreemen
nt to more clearly specify what is “reasonable” with respect to frequeency, duration
n and timing o
of visits mayb
be nsure that the
e Buyers and Seller’s expe
ectations are iin line beforee the agreemeent is finalized. prudent to en
CLOSING DA
ATE 8. TThe date on w
which the Buyyer is to receive title to the
e property annd the Purchaase Price is to
o be paid is to
o the SSeller is the cclosing date. A specific datte, month and
d year are to be filled in th
he spaces pro
ovided to ensure certainty with
hin the contraact. Care must be taken to
o ensure the Buyer(s) choose a weekdaay that is not a holiday so that lawyers wiill be available
e to facilitate
e the closing. Fridays (or TThursdays beffore a Friday h
holiday) are also less d
desirable cho
oices for closin
ng dates since
e, if an issue ddelays the clo
osing, it is dellayed for threee days instead of jusst one. TThe likelihood of a closingg date needingg to be changged is higher ffor a new con
nstruction agrreement than
n for a resale home. Clause 9. sp
pecifically add
dresses delayss caused by eeither party. SSince there iss no second p
part to this claause (as there
e is in the resaale agreemen
nt) stating wh
hat time on cllosing day the property is to be aavailable for tthe final walkkthrough, the blank section
n here may be used for that purpose, if de
esired. More
e often, no tim
me is specified
d here and thhe specific tim
me for the walkthrough is sset up and confirme
ed between Seller’s and Bu
uyer’s Industrry Members ccloser to the cclosing date. TThe blank secction of this cclause is also m
meant to be u
used when vaacant possesssion will not b
be given on closing day, as in the
e case of the p
possession daate being earllier or later thhan the closin
ng date. In th
hese cases, reeference tto a more dettailed clause in an append
ded schedule is required. A
A simple, “po
ossession to b
be 2 weeks affter cclosing” is inssufficient and
d leaves manyy unanswered
d issues that hhave to be ad
ddressed. In
n typical dealss where possession an
nd closing occcur on the same day, this ssection shoulld be left blan
nk. 39 (NO TITLE) –
– Delays cau
used by Buyeer and Sellerr 9. (a) This clausse gives the Seller an oppo
ortunity to exttend the clossing date, with
h notice, if a delay is causeed by the Buyer. (b) This clausse gives the B
Buyer an oppo
ortunity to be
e compensateed by the Seller at a speciffied daily dollar rate if tthe closing daate is delayed
d due to the ffault of the Se
eller. In practtice, Sellers raarely agree to
o this clause b
but it should not be
e left blank. R
Requesting an
n amount (wh
hich may be rrejected in a ccounter offerr) or striking aand initialling the
e deletion is le
eaves less for room for the
e Buyer to claaim that they were not aware of this claause or ggiven an opportunity to re
equest compe
ensation shou
uld there be aa later disputee over a closing delay. 40 PROPERTY M
n”. Only if yo
e, (a) should b
eing used doe
be checked an
oes not deal o
only with the
er has the righ
which the Selle
er is unable o
or unwilling to
o remove andd which the Buyer is unwillling to waive.. CONVEYANC
CE 11. TThe space pro
ovided is to d
describe the type of deed b
being requestted. This is generally a “W
Warranty” deeed for new construcction properties. DAMAGE PR
RIOR TO CLO
OSING 12. TThis clause sp
pecifies that tthe risk of loss or damage to the properrty lies with tthe Seller until the Purchase Pricce is paid. Although the Bu
uyer will be re
equired to obbtain insurancce coverage p
prior to the lending institution releasing mortggage funds, th
he Seller shou
overed by at least one insuurance compaany. This clau
use also makees it clear that the
e Buyer has th
he right to pro
oceed (and re
eceive the inssurance proceeeds) or to teerminate and have ttheir deposit returned if th
he property iss significantlyy damaged beefore closing. 42 A
ADJUSTMEN
NTS 13. A
ween the Buyeer and Seller.. If a cost wass prepaid by the Seller and covers a period beyon
nd the closingg date, then aa charge will b
be made to th
he Buyer (and
d credit tto the Seller) to transfer th
he portion off this cost that related to thhe period after closing to the Buyer. The most common of these is prope
erty taxes, followed by fue
el oil and equiipment lease costs. Industtry Members should process to the
eir clients so tthey are not ssurprised by aany charges that show up at closing tim
me when explain this p
tthey meet wiith their lawyer. This clausse also makess the default position for b
betterments tto be the finaancial responsibilityy of the Sellerr. W
WARRANTIEES 14. (a.) Sellers can be held
d responsible
e beyond the closing date ffor representtations made in the agreem
ment. (b.) Ensures that any leased equipm
ment is prope
erly detailed i n the Schedu
ule Clause 15.. (iv). If equipment is not d
detailed in Claause 15. (iv), tthen Buyer caan assume th ere isn’t any.. If there is to
o be leased equip
pment but the details are not available and there is no schedule referenced in
n Clause 15. (iv), the Seller’s Industry M
Member should ensure thaat they counteer on this clause 14. (b) in order to avo
oid misunderstandinggs later or the
e Seller havingg to pay out aa lease for an equipment ittem that wass not properly handled in the agreem
ment. 43 SSCHEDULES 15. TThe Industry Member representing the
e Buyer should make everyy effort to obtain as much documentation as possible befo
ore drafting th
he offer. Anyy schedules available at thhe time of draafting the offeer should be cclearly ttitled (with both a Name aand letter refe
erence of A, B
B, etc.), all paages numbereed within each schedule (1
1 of 3, 5 of 5, etc.), each page revie
ewed with and initialled byy the Buyer a nd all attacheed to the agreeement in an orderly fformat. The schedules are
e to be clearlyy cross refere
enced to this clause using tthe name and
d letter refereence for each schedule. A
Any schedule
es required which are not aavailable at th
he time the ooffer is drafted should be listed in an ad
dditional clause in an A
Addendum Scchedule. Dattes by which tthey are to bee provided an
nd dates by w
which they aree to be reviewed by should be cle
early specified
d as well as th
he details of nnotice , what happens if deeemed unsatisfactory by the Buyer,, etc. 44 SSITE AND GR
RADING PLA
AN 16. TThis clause alllows either p
party to termiinate the agre
eement if thee Buyer provid
des written n
notice to the SSeller of ttheir dissatisffaction with tthe final site aand grading p
plan, within 4 8 hours of the Buyer’s recceipt thereof.
LOCATION C
CERTIFICATEE 17. Either (i) or (iii), but not bo
oth, is to be ch
hecked, and b
boxes initialleed, to indicatee which type of location ceertificate is being requested. It is in
n the Buyer’s best interestss to have onee prepared in their name sso (ii) is the beest choice from ttheir perspective. W
WORK CHAN
NGES 18. TThis clause alllows for work changes, ass agreed to in writing by thhe parties, in the form of aan amendmen
nt. Such changes must be handled with care witth attention tto detail, incluuding the imp
pact of HST and rebates. 45 TThe cost of any “extras” m
may be paid fo
or by the Buyer to the Selleer directly through the law
wyers’ adjustm
ments at closing, witho
out an adjustment in the sstated purchaase price or m
mortgage amo
ount advanced. Alternativvely, the amendment may be writte
en to increase the purchasse price by thhe net amoun
nt of the “extrras” cost and the mortgage am
mount adjuste
ed accordinglyy. Which metthod is used w
will depend o
on the dollar vvalue of the increases and financial circumstance
es of the buye
er. Smaller dollar value chhanges are offten handled as adjustmen
nts at closing due to
o immaterialiity while large
er dollar oness are more apppropriately h
handled as an
n adjustment in purchase pricce. The latterr is preferable
e from an MLLS® System daata integrity p
point of view since the purrchase price recorde
ed for statisticcal purposes w
will more closely represennt the actual vvalue of the p
property. In eeither case, the ame
endment sho
ould be carefu
ully drafted to
o reflect the sspecifics of th
he change, thee exact cost, and how tthe extra cost is to be paid
d. HOLDBACK AND OCCUP
PANCY PERM
MIT 19. TThis clause de
eals with potential holdbacks relating tto (a) liens reggistered again
nst the propeerty and (b) reelating to tthe delay in tthe provision of an occupancy permit beyond the cloosing date. 46 NEW HOMEE WARRANTY AND DEFIC
CIENCIES 20
0. TThis clause de
eals with the pre‐close pro
ocess of comp
pleting a walkkthrough and
d noting any d
deficiencies on a certificate of possession fo
orm and agre
eeing in writin
ng to an amouunt to be held
d back for eacch deficiencyy and a ttime frame fo
or each to be completed. FREE FROM RUBBISH 21
1. TThis clause co
onfirms that tthe property will be left in a clean statee, free from eexcess building materials, ttools, rubbish, etc. 47 SSELLER’S REESPONSIBILIT
TIES 22. Clause (a) con
nfirms that th
he Seller shalll build in acco
ordance with all applicablee laws, bylaws, regulationss and the tterms of the agreement, including thosse contained in all schedulles and amen
ndments. Clause (b) confirms that th
he seller is responsible for all costs incuurred during cconstruction relating to peermits, surveys, utilitties, etc. PERMISSION
N TO PROVIDE INFORMATION FOR REPORTING
G, APPRAISA
AL AND STATTISTICAL PURPOSES 23. TThis clause co
onfirms the Seller’s permisssion for information relatting to a sale of an MLS® listed propertyy to be retained and disclosed. Th
his clause sho
ould not be sttruck (or deleeted as part o
of a counter o
offer by a Selleer) since NSAR/AVREB
B’s MLS® Rules & Regulatio
ons require th
hat such inforrmation be made availablee. 48 GENERAL 24. (a) Other than the de
eposit(s) portiion, payment for the sale m
must be provvided by the B
Buyer’s lawyeer to the Sellerr’s lawyer as a solicitor’s trrust cheque.
(b) Signaatures made o
outside of allo
owed time fraames are nott valid unless time frame eextensions aree in writin
ng and ratifie
ed by all partie
es. (c) Self e
explanatory, n
no verbal “sid
de deals” are valid. (d) This cconfirms thatt parties do not necessarilyy have to signn original doccuments only,, nor do they have to sign iin person. LAWYERS’ A
APPROVAL 25. TThis clause is a very imporrtant one to b
both the partiies and their Industry Mem
mbers. The d
day, month an
nd year ffilled in here must be such
h that it allow
ws for a reason
nable amounnt of time for the Buyer’s laawyer to com
mplete ttheir review. If the Buyer does not yet have a lawye
er, they may rrequire moree days allowan
nce here than
n one w
who does havve a lawyer already in placce. Keep in m
mind that thiss date is also applicable to
o the Seller’s lawyer’s review so maaking this unn
necessarily lon
ng could workk to the Buyeer’s detrimentt since this is one of the on
nly clauses in the
e standard aggreement which allows for a Seller to teerminate an aagreement, w
while the Buyeer has several otherr potential “outs”. 49 AGENCY RELLATIONSHIP
P 26. 50 This clause is perhaps the most poorly completed of all clauses in our standard agreements, indicating that there is still misunderstanding surrounding agency, customer status and transaction brokerage issues. These are serious issues and ensuring that you and your client understand your relationship and have it accurately documented is very important. The various parts of this section should be completed as follows: If two Industry Members from two different brokerages are representing the Seller and Buyer respectively, or if two different Industry Members from the same brokerage which is a designated agency brokerage are representing the Seller and Buyer respectively, the “does” box should be checked in both sections a and b and the names of brokerages and Industry Members should be filled in accordingly, to show that each party has agency (client) representation. Section c is left blank in this case. If two different Industry Members from a common law brokerage represent the Buyer and Seller respectively, or if the same Industry Member, from either type of brokerage, represents both the Buyer and the Seller, then there are two distinct situations which might apply:  The Industry Member(s) has (have) entered into a transaction brokerage arrangement and is (are) acting as a facilitator(s), then sections a and b are to be left blank and only section c will be filled in with the one appropriate brokerage name and the one or two Industry Member names. OR  One of the parties is being treated as a customer and one is being treated as a client. In this case, sections a and b are filled out with the brokerage name and the Industry Member(s) name(s), with the “does” box being checked for the client party and the “does not” box being checked for the customer party. Section c is left blank in this case. 51 Remember, ““a and b, but not c” or “c, b
but not a and
d b” are the ooptions. With
hin a and b, reemember that “does” is checked for a client relaationship (clie
ent = agency =
= does), “doe s not” is checcked for a cusstomer relatio
onship (customer = n
no agency= does not. When you are in a customer rrelationship w
with a Buyer o
or Seller, you need to tthoroughly exxplain, compllete and have
e signed the aappropriate c ustomer status acknowled
dgement form
m (110, 111 or 112 w
which are man
ndatory underr NSREC Bylaw
w 712.) This significantly rreduces the rrisk of a custo
omer complaining later that the
ey did not fully understand
d the nature oof their relatio
onship with yyou. It is advisable to include this form in the do
ocuments sub
bmitted to the
e customer’s lawyer so thaat they are clearly aware o
of the non‐agency rrelationship as well. TTIME FOR A
ACCEPTANCEE 27. TThe time fille
ed in here rep
presents Novaa Scotia (Atlan
ntic – AST or A
ADT) time un
nless expresslyy specified ass otherwise. Iff one or both of the parties are in a different time zoone, then it iss advisable to clearly indicaate AST or ADT next tto the specificc time in addiition to circlin
ng the AM or PM. V
Verbal extenssions of timin
ng will not hold up in courtt so it is necesssary to havee any time exttensions noteed and initialled by A
ALL parties, m
meaning all naamed Buyers and all name d Sellers, nott their Industrry Members.
TThe city or to
own where the Industry Member is locaated when theey prepare th
he agreementt is filled in affter the “Dated at”. If the Industryy Member pre
epares the aggreement in H
Halifax, but emails it to another provincce or by the Indust ry Member w
when preparin
ng the form aand the country wherre the Buyer ssigns it, Halifaax is filled in b
Buyer should be instructed to note the
e city where th
hey are signinng as well. If the Buyer(ss’) Industry M
Member is pre
esent when th
he Buyer signss the offer, th
hen the Buyer(s’) Industry Member may sign as w
witness in the
e space provid
ded. If the Ind
dustry Membber cannot bee present, thee Buyers shou
uld be advised to siggn in the pressence of another person w
he Buyer(s) m
may have to re
e‐sign with a w
witness preseent at a later time. Underr no circumstaances should an Ind
ually w
witness the signing. A
ACCEPTANC
CE 28. 52 TThis section is completed only if the aggreement is be
eing acceptedd EXACTLY ass is. Verbal exxtensions of ttiming w
will not hold up in court so
o it is necessaary to have an
ny time extennsions noted in writing on the agreemeent and initialled by A
ALL parties, m
meaning all naamed Buyers and all name d Sellers. Ind
dustry Members’ initials DO NOT suffice. TThe city or to
own where the Seller(s) are
e located whe
en they sign tthe agreemen
nt as accepted is filled in aafter the “Dated at”. If the Seller’s Industry Mem
mber receivess the offer in Nova Scotia, but emails itt to another p
province or country where the Selle
er signs it, the
e city or town
n that is filled in is the tow
wn or city wheere the Seller is located when
n they sign it. If the Seller(ss’) Industry Member is present when th
he Seller signss the offer, th
hen the Sellerr(s’) Industry M
Member should sign as witness in tthe space provided. If the Industry Mem
mber cannot be present, tthe Sellers should be advised to siggn in the pressence of another person w
n must be leftt blank. If thee bank later reequires witneesses to the he Seller(s) m
may have to re
e‐sign with a w
witness preseent at a later time. Under no circumstaances signatures, th
should an Ind
ually w
witness the signing. REJECTION 29. TThis section is filled in if th
he Seller is no
ot accepting the offer and is not preparring a counterr offer. The fo
orm allows for the
e notice of rejjection to be timed, dated
d, and signed by either thee Seller or thee brokerage representativve of the Selle
er. For clarityy and transparency, it is prreferable thatt the Seller siggn the rejectiion, rather than the Industry M
Member signing it. COUNTER O
OFFER 30. If the Seller h
has prepared a counter offfer, the date w
which it was pprepared is filled in and th
he Seller(s) siggn where indicated. If this section iss completed, then a completed and sig ned Counter Offer Form 4
410 must acco
ompany tthe agreement when it is ssent back to tthe Buyer’s In
ndustry Mem
mber. 53 TThe section aat the bottom
m for Industry Members’ an
nd lawyers’ coontact inform
mation is for rreference onlyy and is not mandatory to be filled
d in. Some Bu
uyers and Sellers do not knnow the name of the lawyyer who will b
be representing them at the ttime they sub
bmit or respo
ond to an offeer. 4
404 Agree
ement of P
Purchase aand Sale Paart II: Vacaant Land ‐ Urban Sch
hedule TThe propertyy address, Buyyer(s) name(ss) and Seller(ss) name(s) aree to be filled in as they weere in Part I, u
using full address of civvic number, iff available, lo
ot number, if aavailable, subbdivision nam
me, if applicab
ble, complete street name and tow
wn, city or co
ounty. INSPECTION
N 1. TThis clause is one of the Buyer’s best so
ources of protection of theeir interests, even in a vaccant land purcchase. Formal inspections are not often performed on vacaant land purcchases since the risk is considered low. If there has ever been any kind of building or o
other develop
pment on the land, this riskk may not be so low. As su
uch, an Industry Mem
mber representing a Buyerr should neve
er recommendd to a Buyer tthat they deleete this clause. If a Buyer does choose to dele
ete it, the Industry Membe
er should havve the Buyer ssign a letter in
ndicating that they w
were advised
d not to and u
understand th
he risks associated with dooing so. Datess that allow ffor a reasonab
ble amount of tim
me for Buyerss to have insp
pection(s) perrformed shouuld be inserteed here. 54 W
WATER/SEP
PTIC 2. TThis clause sh
hould be com
mpleted with aa check mark and cross refferenced with
h a Schedule by inserting tthe schedule title
e such as “ A” or “B”, consiistent with whatever the SSchedule is tittled ONLY IF tthe property has a w
well AND/OR
R a septic system. Both parties initial th
he boxes, in thhis case. If th
he property h
has neither a well nor a septic syste
em (property is on both municipal wate
er service andd municipal seeptic service o
or has no such services), the
en this clause should be strricken. In thiss case, the booxes are not initialled, but the Buyers aand SSellers need tto initial in th
he margin to cconfirm that tthe clause dooes not apply.. IMPROVEMENTS 3. TThis clause co
onfirms that aany improvem
ments to the property suchh as roads, cu
ulverts, fencees, sheds, wells and septic system
ms are include
ed in the purcchase price, (tthe same wayy that fixturess are included
d with a housse, unless specifically exxcluded). If there is a partticular item th
hat the Buyerr is specificallyy concerned with being either left or removed, the details off this item and
d what is to b
be done with it should be cclearly outlined in the Add
ditional Clauses sectio
on, Clause 5. (m). 55 PROPERTY M
n”. Only if yo
e, (a) should b
be left totally y blank with n
eing used doe
one way or another because the Property Onliine system is down or you are not able to access it, clause (b) is tto be left totaally blank be checked an
nd initialled. and (a) is to b
TThis clause do
oes not deal o
only with the
er has the righ
which the Selle
er is unable o
or unwilling to
o remove andd which the Buyer is unwillling to waive.. 57 GENERAL CO
ONDITIONS 5. (a) througgh (m) 58 Clause 5. deaals with generral conditionss specific to th
he purchase aand sale of vaacant land. N
None of these clauses should be left blank, each one that app
plies is to be ccompleted annd initials placced in the boxxes. Those th
hat do not apply are
e to be struck (crossed out) and initials placed in the margin. Thiss is very impo
ortant since itt clearly indicates the Buyer was aw
ware of the clause being aa standard claause and inten
ntionally deciided to deletee it. (Placing initiaals in the boxe
es for a struck clause is no
ot advised sincce it can creaate confusion re whether tthe clause was orriginally initiaalled as applyiing and then crossed out, without furth
her initials to confirm it waas struck.) TThese clausess are self‐exp
planatory but all must be carefully revieewed with thee Buyer and SSeller to ensure that all parties are
e clear as to w
what is being committed to
o. Failure to do so often rresults in disp
putes that cou
uld have been avoided
d if more care
e was taken at the draftingg of the offer and responding to the offfer stages of tthe process. 59 TThe Buyer’s ssatisfaction th
hat clauses (a) through (c),, (e), (g) and ((i) through (k)) have been m
met is deemeed if tthere is no written notice to the contraary provided b
by the Buyer by the date sspecified with
hin each clausse. If such notice o
of dissatisfaction is provide
ed by the Buyyer, either parrty is at libertty to terminatte, so the Buyyer and ttheir Industryy Member rep
presentative must be care
eful in handlinng these clausses. Care sho
ould be taken to use a reasonable and appropriate time frame
e for each of these conditiions to be meet to prevent the requirem
ment for w
written exten
nsions. Clause 5. (m) provides spaace for any sp
pecific additio
onal clauses n eeded in the circumstancees. If any verrbal agreements h
have been maade between the Buyer an
nd Seller priorr to writing th
he offer, theyy should be clearly reflected here or, alternattively, this spaace may be used to note aa cross reference to a nam
med schedule containing ad
dditional clauses. Industry Mem
mbers are cau
utioned that rrepresenting a Buyer or Seeller in a transsaction involvving vacant laand can be significanttly more complex than a tyypical single ffamily residenntial home traansaction. In
ndustry Memb
bers should avoid being involve
ed in transacttions beyond their level off experience o
or expertise. 4
405 Agree
ement of P
Purchase aand Sale Paart II: Vacaant Land ‐ Rural Scheedule TThe propertyy address, Buyyer(s) name(ss) and Seller(ss) name(s) aree to be filled in as they weere in Part I, u
me, if applicab
wn, city or co
ounty. INSPECTION
N 1. TThis clause is one of the Buyer’s best so
ources of protection of theeir interests, even in a vaccant land purcchase. Formal inspections are not often performed on vacaant land purcchases since the risk is considered low. If there has ever been any kind of building or o
other develop
pment on the land, this riskk may not be so low. As su
uch, an Industry Mem
mber representing a Buyerr should neve
er recommendd to a Buyer tthat they deleete this clause. If a Buyer does choose to dele
ete it, the Industry Membe
er should havve the Buyer ssign a letter in
ndicating that they w
were advised
d not to and u
understand th
he risks associated with dooing so. Datess that allow ffor a reasonab
ble amount of tim
me for Buyerss to have insp
pection(s) perrformed shouuld be inserteed here. 60 IMPROVEMENTS 2. TThis clause co
onfirms that aany improvem
ments to the property suchh as roads, cu
ulverts, fencees, sheds, wells and septic system
ms are include
ed in the purcchase price, (tthe same wayy that fixturess are included
d with a housse, unless specifically exxcluded). If there is a partticular item th
hat the Buyerr is specificallyy concerned with being either left or removed, the details off this item and
d what is to b
be done with it should be cclearly outlined in the Add
ditional Clauses sectio
on, Clause 4. (i). PROPERTY M
n”. Only if yo
e, (a) should b
eing used doe
uation. If the status Online is “Nott Land Registrration” or if yoou are unablee to confirm o
one way or another on Nova Scottia Property O
because the Property Onliine system is down or you are not able to access it, clause (b) is tto be left totaally blank and (a) is to b
be checked an
oes not deal o
only with the
er has the righ
which the Selle
er is unable o
or unwilling to
o remove andd which the Buyer is unwillling to waive.. GENERAL CO
ONDITIONS 4. (a) througgh (i) 62 Clause 4. deaals with generral conditionss specific to th
he purchase aand sale of vaacant land. N
None of these clauses should be left blank, each one that app
plies is to be ccompleted annd initials placced in the boxxes. Those th
hat do not apply are
e to be struck (crossed out) and initials placed in the margin. Thiss is very impo
ortant since itt clearly indicates the Buyer was aw
ware of the clause being aa standard claause and inten
ntionally deciided to deletee it. (Placing initiaals in the boxe
es for a struck clause is no
ot advised sincce it can creaate confusion re whether tthe clause was orriginally initiaalled as applyiing and then crossed out, without furth
her initials to confirm it waas struck.) 63 TThese clausess are self‐exp
planatory but all must be carefully revieewed with thee Buyer and SSeller to ensure that all parties are
e clear as to w
what is being committed to
o. Failure to do so often rresults in disp
putes that cou
uld have been avoided
d if more care
e was taken at the draftingg of the offer and responding to the offfer stages of tthe process. TThe Buyer’s ssatisfaction th
hat clauses (a) through (c) and (e) throuugh (g) have b
been met is d
deemed if theere is no w
written notice to the contrary provided
d by the Buye
er by the datee specified witthin each clau
use. If such n
notice of dissatisfaction is provided by the Buyerr, either partyy is at liberty to terminate, so the Buyeer and their In
ndustry Member reprresentative m
must be carefu
ul in handlingg these clausees. Care shou
uld be taken tto use a reaso
onable and appropriate time fram
me for each off these conditions to be m
met to prevent the requirement for writtten extensions. Clause 4. (i) p
provides space for any specific additional clauses ne eded in the ccircumstancess. If any verb
bal agreements h
have been maade between the Buyer an
nd Seller priorr to writing th
he offer, theyy should be clearly reflected here or, alternattively, this spaace may be used to note aa cross reference to a nam
med schedule containing ad
dditional clauses. Industry Mem
mbers are cau
utioned that rrepresenting a Buyer or Seeller in a transsaction involvving vacant laand can be significanttly more complex than a tyypical single ffamily residenntial home traansaction. In
ndustry Memb
bers should avoid being involve
ed in transacttions beyond their level off experience o
or expertise. 4
406 Agree
ement of P
Purchase aand Sale Paart II: Minii‐Mobile H
Home Scheedule TThe propertyy address, Buyyer(s) name(ss) and Seller(ss) name(s) aree to be filled in as they weere in Part I, u
using full address of civvic number, ccomplete stre
eet name, parrk name, and town, city orr county. INSURANCEE 1. Dates that alllow for a reassonable amou
unt of time fo
nce company that the home iss insurable sh
hould be inserrted here. Thhis date shoulld be the sam
me or later thaan the nspection clau
use 2(a) since
e insurability issues are oft en discovered upon inspection. Note tthat the date in the in
Buyer is not o
obtaining insu
urance by the
e date specifie
by that date tthat the home is indeed insurable. 64 INSPECTION
N 2. TThis is one off the most important clausses and is one
e of the Buyerr’s best sourcces of protecttion of their in
nterests. A
As such, an In
ndustry Member representing a Buyer sshould neverr recommend to a Buyer th
hat they delette this clause. If a Buyer does choose to delette it, the Indu
ustry Memberr should havee the Buyer sign a letter ind
dicating tthat they werre advised no
ot to delete th
his clause and
d understand the risks asso
ociated with doing so. Dates that allow for a re
easonable amount of time for Buyers to
o have inspecction(s) perforrmed should be inserted h
here. More amendments are wrritten with reference to th
he above clau se than perhaaps any other but the clau
use and related amen
ndment are often misunde
erstood. Once a Buyerr submits an aamendment ((or other form
m of written nnotice of dissatisfaction) in
ndicating dissatisfaction with inspecction results, and includes a written ins pection repo
ort, the Buyer is “giving nottice” that tthe inspection did not meet their satisffaction. ember does not submit succh an amendm
ment (or otheer form of wrritten notice o
of If the Buyer’ss Industry Me
dissatisfaction) to the Seller’s Industry Member befo
ne day, the inspection clau
use is deemed to be
e met and ne
either Buyer n
nor Seller can terminate thhe deal on thee basis of thiss clause. If the Buyer’ss Industry Me
ember does su
ubmit such an
n amendmennt (or other fo
orm of written
n notice of dissatisfaction) to the Seller’s Industry Member befo
ne day, along with pertinen
nt ection report,, this constitu
utes notice too the contraryy by the Buyer, either Buyeer or sections of a written inspe
SSeller can terrminate the deal on the baasis of this claause. There iss no timeline specified for when the Bu
uyer of SSeller must te
erminate. The termination
n does NOT h
have to be witthin the inspeection deadlin
ne, only the n
notice of tthe Buyer’s d
dissatisfaction
n AND THE PR
ROVISION OF A WRITTEN IN
NSPECTION R
REPORT. However, if aan amendmen
nt (or other fo
orm of writte
en notice of d issatisfaction
n) is prepared and submitteed w
without a written inspection report, then it is debattable how a juudge would in
nterpret the q
question of w
whether proper notice
e was given. To eliminate
e the risk of a judge ruling tthat notice w
without the reeport constitu
uted NO NOTICE, Indu
ng Buyers mu
ust ensure thee report is pro
ovided. If the Buyer iss not terminaating at this tiime, the Buye
er will often ppropose a solution to the inspection isssue in the “notice of disssatisfaction” amendment (ALONG WITTH A COPY OFF THE WRITTEEN INSPECTIO
ON REPORT) fo
or the SSeller’s consideration. Th
he Seller can d
do any of the following: endment with
h the propose
ed solution w
within the timeline allowed
d for the amendment  Seller accepts ame
itselff. If so, neither party can n
now terminatte the deal onn the basis off this particulaar clause. Insspection is dee
emed met byy the two partties agreeing to modify thee contract in some way.  Seller rejects the aamendment aand terminates the deal.
65 
Sellerr rejects the aamendment ((or allows it to
o time out wiithout respon
nding) but do
oes not termin
nate the deal. The Seller m
may or may no
ot propose a ccounter ame ndment. At tthis point, either party can
n terminate, the deaal is “in limbo
o” until a partty decides to propose anotther amendm
ment or terminate. Buyer may still terminate aat this point in time, they hhave NOT forrfeited their rright to termin
nate by The B
subm
mitting an ame
endment sincce that amend
dment was N
NOT accepted. Continued negotiation d
does not, in itse
elf, waive a te
ermination right. FIXTURES/C
(a.) The date inserted h
here is the lasst date that the Buyer(s) vviewed the prroperty. 66 (b.) Chatte
els that the B
Buyers are req
questing be in
ncluded in thee property are to be listed
d here. Note tthat this speciffication is neccessary regard
dless of what was listed ass being includ
ded by the Sellers in the lissting inform
mation. Altho
ough, legally, fixtures are aautomaticallyy included unlless specificallly excluded, it is advisaable to list here any fixture
es that that m
might be contrroversial in teerms of whether parties in
ntended them to be include
ed or not. Exaamples includ
de outside plaay equipmentt, bathroom m
mirrors, traileer hitch, etc. W
Where there aare difference
es between the listing infoormation and this clause, tthis clause prevails since this is a formal agreementt and the listing informatioon is not. Thee “in good wo
orking order” portion of the
e clause may b
be stricken byy the Buyers, if appropriatte, or counterred by the Sellers. Note th
hat “free of enccumbrances” means there
e are no outstanding loans on any of thee items includ
ded. If there were and a Seller failed tto counter this point, the SSeller would be obligated to pay out th
he loan beforee closing to com
mply with the
e “free and cle
ear” statement. (c.) This clause must be
e filled out an
nd initialled b
by all parties rregardless of whether therre is any leaseed equipment. If therre is no leased
d equipment,, then “Not A
Applicable – N
No Equipment Leased” sho
ould be quipment is, w
what inserted. If there is leased equipment, then a clause to inndicate clearlyy what the eq
e is with and w
what is to be done with th e equipmentt lease should
d be inserted. company the lease
ples: Examp
or the electricc hot water hheater from SSears at a cosst of approxiimately “Buyyers to assume the lease fo
$14.0
00 per month
h plus HST, su
ubject to the B
Buyer’s revieew of documeentation as peer Schedule A
A” OR ers to fully pa
ay out the eleectric hot water heater froom Sears, priior to closing,, and to provvide “Selle
writtten confirmattion of the pa
ayout to the B
Buyer’s Indusstry Member prior to the p
pre‐close walkkthrough.” GENERAL CO
ONDITIONS 4. 67 TThese clausess are self‐exp
planatory but all must be carefully revieewed with thee Buyer (and Seller, when presented). Blanks must be accuratelyy completed aand the approopriate boxess initialled. TThese are imp
portant clauses that p
protect the Buyer and should not generrally be struc k when prepaaring an offerr. However, if one is tto be deleted
d, after carefu
ul consideration, it should be clearly strruck and initiaalled in the m
margin next to
o the specific clausse being strucck. This is verry important ssince it clearlyy indicates th
he Buyer was aware of thee clause being a stand
dard clause an
nd intentionaally decided to
o delete it. TThe Buyer’s ssatisfaction th
hat clauses (a) through (d) have been m
met is deemed
d if there is no
o written nottice to tthe contrary provided by tthe Buyer by the date speccified in the bbolded section below these clauses. If such o the Buyer an
nd their notice of disssatisfaction is provided by the Buyer, either party is at liberty to tterminate, so
Industry Mem
mber representative must be careful in handling theese clauses. C
Care should b
be taken to usse a reasonable and appropriate time frame
e for these co
onditions to bbe met to preevent the requ
uirement for written extensions. b), and (c) allo
ow for the Bu
uyer to make it a conditionn of the sale tthat he/she b
be approved b
by park Clauses (a), (b
managementt and accepte
ed as a tenantt, be satisfied with the currrent rental am
mount and bee satisfied with the park rules and regulationss before firming up the deaal. If the purcchaser is plan
nning for som
meone else to occupy tthe unit, clau
use 4 (a) should be modifie
ed and initialle
ed to say “thee Buyer’s tenant”. Regard
ding clause (c), it is important to ensure that tthe park ruless and regulations providedd and revieweed are the mo
ost current veersion available. ows for the B
Buyer to confirm that the p
park managem
ment has insp
pected the prroperty, at the Seller’s Clause (d) allo
expense, and
d has confirme
ed that the home can rem
main on the lo t before firming up the deeal. 68 Confirmatio
on of Detailss (CLAUSE NO
OT TITLED) 5. TThis clause prrovides for th
he Buyer to sttate the speciific details of the unit bein
ng purchased so they can b
be officially conffirmed by the
e Seller upon acceptance o
of the offer. TThe Buyer an
nd their Indusstry Member should obtain this information fro
om the certifiication tag atttached to thee unit, rather than rely on information provided by the Seller. These tags ccan generally be found in o
one of four loocations: under kitchen sin
nk, inside cup
pboard door, on door to the fuse panel or on the exterior of the unit. If any of the sspecifics are u
unknown to tthe Buyer at tthe time the ooffer is made, the Industryy Member draafting tthe offer should specify (in
n a separate cclause include
ed in an addeendum on Forrm 420) that the Seller shaall provide such details by a ccertain date aand that the B
Buyer shall bee at liberty to
o terminate if not received or if unsatisfied byy the details p
provided. Th
his addendum
m would be tittled and cross referenced in Part I of th
he agreement. 4
407 Agree
ement of P
Purchase aand Sale P
Part II: Mu
ulti‐Unit Reesidential Income Prroperty Schedule TThe propertyy address, Buyyer(s) name(ss) and Seller(ss) name(s) aree to be filled in as they weere in Part I, u
me, if applicab
wn, city or co
ounty. Be sure to check the civic numbeers carefully iif the purchasse is for a mu
ulti‐unit, tto confirm if the units are officially num
mbered in the
e format of 2220A and 220B
B or 220 and 2
222, for a dup
plex, for example. 69 INSURANCEE 1. Dates that alllow for a reassonable amou
unt of time fo
e should be in
nspection clau
use 2(a) since
e insurability issues are oft en discovered upon inspection. Note tthat the Buyer is not o
obtaining insu
urance by the
e date specifie
ndeed insurab
ble. Buyers sshould make ssure their ins urance comp
pany understaands the inten
nded use of the properrty since insurance will be different for a rental propperty than a p
primary resideence. INSPECTION
N 2. (a.) This iis one of the most importaant clauses an
nd is one of thhe Buyer’s beest sources off protection o
of their interests. As such
h, an Industry Member rep
presenting a B
Buyer should never recommend to a Bu
uyer that they delete this clause. If a Buyer does choo
ose to deletee it, the Industtry Member sshould have tthe Buye
er sign a letterr indicating th
hat they were
e advised not to delete this clause and understand the risks assocciated with do
oing so. Date
es that allow ffor a reasonaable amount o
of time for Bu
uyers to have inspe
ection(s) perfo
ormed should
d be inserted here. 70 (b.) This cclause should
d be complete
ed with a check mark and cross referen
nced with a Scchedule by inserting the schedule title such as “ A” or “B”, consisstent with whhatever the Scchedule is titlled ONLY IF th
he property has a we
ell AND/OR a septic system
m. Both partiees initial the b
boxes, in this case. If the property has n
neither a well nor a septic system (prop
perty is on botth municipal water servicee and municip
pal septic service), then this clause should be stricken. In this casee, the boxes are not initialled, but the Buyers and SSellers need tto initial in the
e margin to cconfirm that tthe clause doees not apply. FIXTURES/C
71 (a.) The date inserted here is the last date that the Buyer(s) viewed the property. (b.) Chattels that the Buyers are requesting be included in the property are to be listed here. Note that this specification is necessary regardless of what was listed as being included by the Sellers in the listing information. Although, legally, fixtures are automatically included unless specifically excluded, it is advisable to list here any fixtures that that might be controversial in terms of whether parties intended them to be included or not. Examples include outside play equipment, bathroom mirrors, garage shelving, etc. Where there are differences between the listing information and this clause, this clause prevails since this is a formal agreement and the listing information is not. The “in good working order” portion of the clause may be stricken by the Buyers, if appropriate, or countered by the Sellers. Note that “free of encumbrances” means there are no outstanding loans on any of the items included. If there were and a Seller failed to counter this point, the Seller would be obligated to pay out the loan before closing to comply with the “free and clear” statement. (c.) This clause must be filled out and initialled by all parties regardless of whether there is any equipment leased. If there is no leased equipment, then “Not Applicable – No Equipment Leased” should be inserted. If there is leased equipment , then a clause to indicate clearly what the equipment is, what company the lease is with and what is to be done with it should be inserted. If the equipment is to be assumed by the Buyer then specifics re the monthly cost and reference to another clause that allows the Buyer to review and be satisfied with all the details should be included in the clause as well. Examples: “Buyers to assume the lease for the furnace from Irving Oil at a cost of approximately $80.00 per month plus HST, subject to the Buyer’s review of documentation as per Schedule A” OR “Sellers to fully pay out the furnace lease with Irving Oil, prior to closing and to provide written confirmation of such payout to the Buyer’s Industry Member prior to the pre‐close walkthrough.” 72 PROPERTY M
n”. Only if yo
e, (a) should b
eing used doe
be checked an
oes not deal o
only with the
er has the righ
which the Selle
er is unable o
or unwilling to
o remove andd which the Buyer is unwillling to waive.. GENERAL CO
ONDITIONS 5. through
h 11. 74 75 Most of these
e clauses are self‐explanattory but all m
must be carefuully reviewed with the Buyyer (and Seller, when presented). Blanks must be accuratelyy completed aand the approopriate boxess initialled. TThese are imp
portant clauses that p
protect the Buyer and should not generrally be struc k when prepaaring an offerr. However, if one is tto be deleted
d, after carefu
ul consideration, it should be clearly strruck and initiaalled in the m
margin next to
o the specific clausse being strucck. This is verry important ssince it clearlyy indicates th
he Buyer was aware of thee clause being a stand
dard clause an
nd intentionaally decided to
o delete it. Note that clauses 5., 6. and 7., each spe
ecify the num
mber of days bbeyond accep
ptance that th
he Seller has to provide the requested doccuments the Buyer. The B
Buyer’s satisfaaction with th
he informatio
on provided by the SSeller is deem
med if there iss no written n
notice to the contrary provvided by the Buyer within the number of days beyond receipt as specifie
ed in the bolded section be
elow these claauses. If such
h notice of dissatisfaction is provided by tthe Buyer, eitther party is aat liberty to te
erminate, so tthe Buyer and their Industtry Member representativve must be caareful in hand
dling these claauses. Care s hould be takeen to use reasonable and appropriate n
numbers of days for both tthe provision of the docum
ments and thee review of th
he documentts in tthese clausess to prevent cconfusion and
d the requirem
ment for writtten extension
ns. TThe financial information received relating to Clause
es 6., 7. and 110. should bee reconciled b
by the Buyer (or their lawyer or acccountant) to e
ensure that th
here are no d
discrepancies between thee rent amountts and securitty deposits agre
eed to in the lleases compaared to the re
ent revenue reeflected on th
he financial sttatements an
nd the security depo
osit amounts transferred aat closing. The Buyer will bbe responsible for the secu
urity depositss after closing so it iss critical that they ensure they have recceived the coorrect amountts. Clause 9. re h
handling and provision of kkeys is a very important claause since isssues with keyys are commo
on at closing. Indu
ng Sellers sho
ould review thhis clause careefully with th
he Seller to en
nsure tthey understand their obligation and m
may also wantt to remind Seeller of this o
obligation closser to closing date to avoid closing issues and de
elays. A
ADDITIONA
AL CLAUSES 12. 76 TThis section m
may be used ffor additional clauses if there is sufficieent room but is more commonly used to cross reference add
ditional sched
dules of clausses, as follows: “Schedule A –
– General” atttached heretto and formin
ng part of thiss agreement” It is very important to list all such sched
dules here, unless they weere already crross referenced in the begginning (Agreement o
of Purchase aand Sale Schedules) section
n of Part I Forrm 400 wheree “Other” was checked offf or in Clause 12. of Part I Form 4
400). These m
must be clearly cross refer enced by theeir title, so thaat anyone reaading the main parts off the agreeme
ent knows wh
hat additional schedules too look for. Ch
heck the nam
mes of schedules and be sure the re
eferences to them in this ssection agree
e completely.
A
As the note b
below Clause 12. indicates,, additional clauses may innclude those specific to en
nvironmental assessment isssues. Industry Mem
mbers are cau
utioned that rrepresenting a Buyer or Seeller in a transsaction involvving an incom
me property can be significantly more com
mplex than a ttypical single family resideential home trransaction an
nd may involve highe
er risk. Industtry Members should avoid
d being involvved in transacctions beyond
d their level o
of experience or expertise. 77

nsar standard forms guide - phase i - april 30

Transcription

Similar documents

K.D. CAPITAL EQUIPMENT, LLcac

2 auctions - AuctionZip.com

Take Notice!!! This Auction is one you will want to attend.

Guidance For Development Of An Emergency Fallout Shelter

auction ad - Musser Bros. Inc

Printable Flier - Beckort Auctions, LLC

Flyer - Lange Auctions

Enfield Auction Bill

Mincom New Choice Realty Ltd. Brokerage Brochure

FARMLAND AUCTION