Chapter 4.2: BC Real Estate Contracts Flashcards
The law and equity act is part of _____________
Section 59
Under _________________ contracts don’t have to be in ______________ to be valid or enforceable
Common law
Writing
Under common law, contracts can be _________ or _________
Oral or implied
And written too - but not mandatory
The court will enforce oral contracts, but if they can’t, what remedies may they award?
1) deposit can be returned
2) compensation can be ordered
3) legal fees can be reimbursed (rare if other remedies are already provided)
The _______________(section______) states that in most cases a contract dealing with real estate should be in __________ to be enforceable
Law and equity act (section 59)
Writing
If the contract is not in writing, it is not _______, __________, or __________, just means it’s hard to enforce
Void, voidable, or illegal
There are _____ exceptions to Section 59
3
3 exceptions to Section 59
1) where the party seeking to enforce the contract can prove that the party denying it had acted in such a way, that indicated the existence of the contract (such as supplying a bank draft or some sort of deposit)
2) where the party seeking to enforce the contract had reasonably relied on the contract and performed some act (spending $)
3) it does not apply to leases for a term of three years or less (as 3+ year leases need to be in writing)
The _____________ deals with agreements in restraint of trade and misleading advertisement
Competition act
The _____________ ensures that each company must be free to set its own commission rates an splits with the cooperating banker
competition act
You can be charged with ___________ whether or not you actually put your agreement / scheme into effect
Premeditation baby!!
Price fixing
________________ of the Act sets out a number of criminal conspiracy offences associated with agreements between competitors
Section 45
3 illegal things a person/business can do by working with a competitor
A) to fix, maintain, increase or control the price/production for the supply of the product
B) to allocate sales, territories, customers or markets for the production or supply of the product; or
C) to fix, maintain, control, prevent, lesson or eliminate the production or supply of the product
To determine whether a given representation is false or misleading, the court is required to asses the __________________ conveyed by the representation, as well as its ______________
General impression
Literal meaning
*this is for misleading advertisement
Misleading advertisement can be _________ or _____________ representation to the public
Written or oral
For a misleading advertisement, the statement must be false or misleading in a _______________________
Material respect
*all of disclosures that effect your influence to buy
For a misleading advertisement, whether the statement is misleading is whether an _______________ person would be misled
Inexperienced
To escape liability for a misleading advertisement
You must show that you took all the care of a reasonable person and that you honestly believed the representation made was true
PIPA stands for what?
Personal info protection act
PIPA does what?
Regulates the way PRIVATE SECTOR ORGANIZATIONS, collect, use, keep, secure, and disclose personal information
There are ________ PIPA principles
10!
The 10 PIPA principles
1) be accountable
2) identify the purpose **
3) obtain consent **
4) limit collection **
5) limit use, disclosure, rentention
6) be accurate
7) use appropriate safeguards
8) be open
9) given individuals access
10) provide recourse
PIPEDA stands for what?
Personal Information Protection and Electronic Documents Act
What does PIPEDA do!
Establishes how a business engaged in commercial activity can collect, use, and disclose information
What is included in the description: personal information
- Name, age
- Home address, phone number
- Marital status, religion
- Race, ethnic origin, sexual orientation
- Education
- Income, purchases, and spending habits
- Employment information
Before collecting, using, or disclosing personal information, PIPEDA requires private sector organizations to __________________________
Obtain the persons consent
Always consent!!
Licensees are designated by the act to report 2 things for FINTRAC, what are they?
1) large cash transaction record
2) suspicious transaction report
The _________________ must be done for each client
FINTRAC Form
FINTRAC stands for what?
Financial transactions and reports analysis centre of Canada
For the FINTRAC form, what should be included in it?
The client information record should include the clients name, address, date of birth, and the nature of the clients principle of business
A large transaction is considered $_____________ or more in cash
$10,000
Or a total $10,000 in multiple transactions
How does the large transactions $10,000 work?
1) in a single transaction
2) in two or more transactions that were made within 24 hours by / on behalf of the same individual or entity
A large transaction must be reported to FINTRAC within _____________ after the transaction
15 days
What should be included in a large transaction report to FINTRAC!
1) how the transaction was initiated
2) how the transaction was completed
3) account information (of set up for the transaction)
4) the individual conducting the transaction
5) the entity on whose behalf the transaction was conducted
When is a large transactions record not needed
When the cash comes from financial entities such as banks or public bodies such as government
Real estate contracts must be ____________ to be enforceable
Signed!
Both signatures = enforceable by both sides of the party
The listing contract is between the _________ and __________. And also the ____________ and _________ (vendor)
Between seller and brokerage
Listing agent and seller
The Contract of Purchase and Sale (CPS) consists of the 3 P’s, which are
Parties (buyer and seller)
Property
Price
The Contract of Purchase and Sale (CPS) is between __________ and ___________. And also, ______________ and _____________ (buyer)
Between the buyer and seller
Selling agent and purchase (buyer)
Contracts are enforceable only against the persons who __________________
Signed the document
___________________ that is gathered by licensees from Seller and Buyers is now protected by legislation
Personal information
This protection requires licensees to obtain the ______________
Informed consent
When determining party legal rights, the place to look is where?
Terms of the contract!
What are the 3 informative components to a listing contract?
1) property has to be described accurately and signed by all owners
2) title search - to prove real owners
3) a copy of listing agreement must be given to all parties of a listing contract
The listing contract does not show what?
Possible contaminations!
It’s just a listing contract
What is a listing agreement?
A contract between the vendor (seller) & a real estate brokerage (not agent)
The ___________ is not a party to the listing agreement
Purchaser
The __________cannot rely on or be part of a listing contract
Purchaser (buyer)
________________ : while the contracting party is still the brokerage, the vendor (seller) agrees that the brokerage will appoint one or more specific licensees to act as the vendors sole agent
Designated agency
It is important to investigate information independently… What does this mean
You cannot get away with “the seller told me”
The seller is not ____________ to accept an offer
Obligated
Satisfactions of the terms of the listing agreement will _________ trigger the payment of commission by the seller
Likely
You are not _________ to your commission
Entitled
If all terms are not met _____________
No commission paid
The realtor must present all _________
Offers
If you see a stupid and long quote in one of the questions the answer is ____________
Law and equity act
A contract of purchase and sale (CPS) is between the _________ and ___________, there is no agent 
Buyer and seller
the three P’s to contract of purchase and sale
Parties (buyer and seller)
Property
Price
The contract of purchase and sale does not need…
1) statement of adjustments
2) deposit
3) commission
The contract of purchase and sale is ______________ with _____________
Binding
No deposit
The contract of purchase and sale treats deposit as a __________
Condition
Agents hold the deposit as a __________
Stakeholder
A __________ is a fundamental term of a contract
Condition
An essential term!
If a condition is breached, what can you do?
- terminate the contract
- sue for damages or specific performance
Example: couldn’t get financing
A ___________ is a subsidiary term of a contract
Warranty
Minor term
If you breach a warranty, you can
•sue for damages
You cannot terminate the contract
Example: did not paint the house as promised
___________ warranties are necessary to preserve a party’s right to sue after the sale completes
Written
A condition precedent is what?
Subject clauses!
Examples: Financing, inspection, title search
_________________: performance of some act before the contract is binding upon the parties
Condition precedent
__________________: After completion of contract of purchase and sale, the agreement and the parties rights under it or merged and they can no longer rely on the terms of any contract proceeding delivery of the deed, but must look at the deed itself or any remedy
The doctrine of merger
- Severely limits the remedies available to the party’s
_________________________: A condition that is holy dependent on the will, or actions, of someone who is not a party to a contract (bank)
True condition precendent
___________________: after the contract is formed
A condition which will discharge the principal (primary) obligations of a party to the contract
Condition subsequent
Name an example of a condition precedent
For example: Financing
How can you remove a condition precedent?
1) can satisfy / fulfil the condition
2) can waive (the person who added it only)
What is an example of a true condition precedent
For example… Mortgage assumption
How can you remove a true condition precedent
1) can satisfy / fulfil the condition
* you cannot waive
Name an example of a condition subsequent
For example… If the buyer defaults on any of the buyers deposit obligations, the seller may choose to terminate the contract
How do you remove condition precedent (subject clauses)
To remove… Must deliver written notice to each party before the deadline
You can:
1) fulfil the obligations outlined
2) May only be waived by the party who is benefitted from the condition
If the property inspector reports that everything is fine, the buyer can declare the subject clause _________
Fulfilled
If the buyer decides to proceed with his or her purchase without any inspection, the buyer ___________ the subject clause
May waive
How is risk associated with selling, and how is it distributed
All buildings on the property and all other items included in the purchase and sale will be, and remain, at the risk of the seller until 12:01 AM on the completion date
All buildings on the property and all other items included in the purchase and sale will be, and remain, at the risk of the seller until _______ on the completion date
12:01am
At that time, The property and all included items will be at the risk of the buyer
___________________ is not a protection to the seller! And will not form part of the contract of purchase and sale (unless stated)
Protecting the buyer includes:
- pre qualifying the buyer
- ask buyer to use his best efforts to satisfy conditions
- time clause or “72 hour clause” (removal of conditions by specified time if better offer is received)
- specific time on condition precedent (something that must occur)
What does PDS stand for?
Property disclosure statement
The ____________ promotes useful communication about a property’s condition
PDS
The PDS also provides a ______________ that enables purchasers to establish what information was provided at the time of the making of the contract of purchase and sale
Written record
The PDS does not form part of the contract unless specific wording to his effect is inserted in the ________________
Contract of purchase and sale
In ______, the disclosure should be limited to the owners unit only, and should not include a statement regarding _____________
strata
Common property
Amending the contract of purchase and sale (bad idea)
An amendment constitutes a contract to change an _____________
Existing contract
______________ is accepted, but one of the parties later wants to change the __________ of purchase and sale, the licensee who represents the party seeking an amendment must exercise caution
After offer
Contract
Amending a contract of purchase and sale tips, tricks, and rules
1) 1st confirm that the amendment Will not terminate the existing contract
2) Will not legally binding on the seller and buyer Until finalized in writing and signed by all parties to the original contract
3) Must expressly approve any amendment to it
4) must be put into writing and signed by all parties
5) The licensee must, without delay, deliver a copy of the amendment to each party
Assigning contract of purchase and sale, specifics
- assignment needs to be in writing
- Assignment is Absolute (for the whole amount) and is unconditional (cannot charge a fee)
- notice of the assignment has been given in writing to the original promissor
Contract of purchase and sale can be assigned if
1) The contract includes the standard assignment terms
2) The assignments not prejudiced the seller (example mortgage approval)
3) The contract does not prohibit assignment
Contract of purchase and sale must contain two standard assignment terms, unless instructed otherwise by the buyer… What are these terms?
1) The contract must not be assigned without the written consent of the seller
2) The seller isn’t titled to any profit resulting from an assignment of the contract by the buyer or any substignt assignee
What does CSAIR stand for
Condo and strata assignment integrity register
Under CSAIR, developers are required to
- collect comprehensive information about any assignment
- Report it to the CSAIR
- That’s only applies to development properties with five or more residential strata lots
Exemptions to developers requiring to contact CSA I R
• industrial or commercial purposes
•Bare land strata lots
• development property that does not consist of strata lights
What are the five specific criteria when reporting to CSAIR
- The entire agreement
- A partial assignment
- Any subsequent assignment
- An assignment of a lease agreement with the term for three years or more
- Periodic online reporting through land title and service authority
True or false… Developers must give consent for any assignments
True
True or false the developer can charge a fee for assignments
True
Information collection requirements for proposed parties to the assignment (people)
Both the assignor and the assignee
-Full legal names, date of birth, citizenship, residency, tax identifiers, principal residence, and contact information
Information collection requirements if it is a corporation
Developer must collect its name, nine digit business number, address, contact person regarding the assignment
Information collection requirements assignment agreement (property)
Information about the strata lot such as purchase price, the date of the agreement and the consent, assignment fee, amount payable to the assigner for the assignment
True or false a Party who reasonably relied on the oral contractor Real Estate will be able to enforce the contract
True
True or false… The court has the power to enforce an oral contract respecting a disposition of land, if necessary to avoid an inequitable or unfair result or the party relying on the contract has substantially altered his position
True!!
True or false: The following is an offence under the competition act Agreements in restraint of trade
True
The acts of discouraging the reduction of prices, placing upwards pressure on the prices, and discrimination against someone because of their low pricing policy, are offences under the
Competition act
Before providing trading services to a consumer, a licensee must always obtain
The informed consent of the customer
When completing a listing contract, a licensee should
Independently check information with the appropriate authority were possible
Where a buyer makes an offer to purchase land, and does not pay a deposit
A contract will be formed on acceptance without existence of a deposit
Where a purchase is under standard contract to purchase and sale refuses to perform, the vendor will not have the following remedy
The forfeiture of a deposit, representing 50% of the purchase price, as liquidated damages
In a binding contract, A condition precedent can best be described as
A condition that must occur before a party is liable to perform his or her principal obligations under the contract
A seller refuses to sign a subject removal form to strike out a condition precedent from a contract to purchase and sale. Assuming that the condition was made exclusively for the benefit of the purchaser, the agreement is
Binding
