Chapter 4.2: BC Real Estate Contracts Flashcards by Richie Sakhon

The law and equity act is part of _____________

Section 59

How well did you know this?

Not at all

Perfectly

Under _________________ contracts don’t have to be in ______________ to be valid or enforceable

Common law

Writing

How well did you know this?

Not at all

Perfectly

Under common law, contracts can be _________ or _________

Oral or implied

And written too - but not mandatory

How well did you know this?

Not at all

Perfectly

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)

How well did you know this?

Not at all

Perfectly

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

How well did you know this?

Not at all

Perfectly

If the contract is not in writing, it is not _______, __________, or __________, just means it’s hard to enforce

Void, voidable, or illegal

How well did you know this?

Not at all

Perfectly

There are _____ exceptions to Section 59

How well did you know this?

Not at all

Perfectly

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)

How well did you know this?

Not at all

Perfectly

The _____________ deals with agreements in restraint of trade and misleading advertisement

Competition act

How well did you know this?

Not at all

Perfectly

The _____________ ensures that each company must be free to set its own commission rates an splits with the cooperating banker

competition act

How well did you know this?

Not at all

Perfectly

You can be charged with ___________ whether or not you actually put your agreement / scheme into effect

Premeditation baby!!

Price fixing

How well did you know this?

Not at all

Perfectly

________________ of the Act sets out a number of criminal conspiracy offences associated with agreements between competitors

Section 45

How well did you know this?

Not at all

Perfectly

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

How well did you know this?

Not at all

Perfectly

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

How well did you know this?

Not at all

Perfectly

Misleading advertisement can be _________ or _____________ representation to the public

Written or oral

How well did you know this?

Not at all

Perfectly

For a misleading advertisement, the statement must be false or misleading in a _______________________

Material respect

*all of disclosures that effect your influence to buy

How well did you know this?

Not at all

Perfectly

For a misleading advertisement, whether the statement is misleading is whether an _______________ person would be misled

Inexperienced

How well did you know this?

Not at all

Perfectly

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

How well did you know this?

Not at all

Perfectly

PIPA stands for what?

Personal info protection act

How well did you know this?

Not at all

Perfectly

PIPA does what?

Regulates the way PRIVATE SECTOR ORGANIZATIONS, collect, use, keep, secure, and disclose personal information

How well did you know this?

Not at all

Perfectly

There are ________ PIPA principles

10!

How well did you know this?

Not at all

Perfectly

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

How well did you know this?

Not at all

Perfectly

PIPEDA stands for what?

Personal Information Protection and Electronic Documents Act

How well did you know this?

Not at all

Perfectly

What does PIPEDA do!

Establishes how a business engaged in commercial activity can collect, use, and disclose information

How well did you know this?

Not at all

Perfectly

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