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UBC Applied Course > Contracts > Flashcards

Contracts Flashcards

1
Q

Introductions to Contracts

A

Introductions to Contracts

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2
Q

There are 2 main categories of contracts you will encounter

A

1) Agency contracts (Listing / exclusive buyers)

2) Contract of purchase and sale

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3
Q

Service agreements are between

A

Your brokerage and the client you are representing on behalf of your brokerage

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4
Q

Written service agreements are required under

A

The Real Estate services Rules when representing sellers (unless waived by the seller client),

And, anytime you create an agency relationship with a seller

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5
Q

While you as a licensee play a part in the drafting and negotiating of the terms of the contract

A

Neither you, nor your brokerage are a party to that agreement

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6
Q

Any contract you facilitate the drafting of, whether your brokerage is a party to it or not,

A

Must be drafted with reasonable care and skill as per the Real Estate Services Rules

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7
Q

Multiple Listing Contract

A

Multiple Listing Contract

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8
Q

The purpose of the MLS contract

A

The multiple listing contract is a standard form service agreement used by most trading services licensees when entering into an agency relationship with a seller client

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9
Q

Who is the MLS contract between?

A

Is between the seller and the real estate brokerage, listing the property for sale

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10
Q

What does the MLS contract outline?

A

It outlines the terms of the listing, including the time period, the listing price, the parties to the listing, the address and legal description of the property to be sold, the commission to be paid and obligations of the seller and the listing brokerage.

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11
Q

The types of Multiple Listing Contracts

A

Different versions of the contract available depending on whether your brokerage practices designated agency or brokerage agency

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12
Q

The real estate services to provide to a seller are usually set out in the

A

Schedule A of the Multiple Listing Contact

These represent contractual promises made to your client, and should be reviewed with your client as well as with your managing broker

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13
Q

Service agreement does not replace the Disclosure of Representation in Trading Services Form

A

Service agreement does not replace the Disclosure of Representation in Trading Services Form

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14
Q

The Disclosure of Representation in Trading Services Form

A

is a mandatory disclosure document created by the BCFSA that outlines whether you will or will not be entering into an agency relationship with a consumer but does replace the requirement to create a contractual relationship with the client using the MLS contract or other service agreement

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15
Q

Disclosure of Representation in Trading Services Form is required for who?

A

Is provided to all consumers who you may be assisting including buyers and unrepresented parties

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16
Q

Service agreement between your brokerage and a client include

A

-Listing contracts
-Buyer’s agency contracts

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17
Q

Service agreements are entered into when?

A

Once you and your client agree that yo u are going to create an agency relationship and work together and outline the obligations you, your brokerage, and your client have under the contract

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18
Q

The service agreement must also include the following information

A

-Your clients name, your name, and your brokerages name

-The address of the property being listed

-The date on which the service agreement begins and ends

-A general description of the services being provided by your brokerage

-The amount of remuneration being earned by the brokerage and the circumstances in which it will be payable

-The amount of the total remuneration being paid to a cooperating brokerage if there is one

-If there is no cooperating brokerage, the amount to be retained by your brokerage

-Provisions respecting use and the disclosure of your clients personal information

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19
Q

If your brokerage and your client enter into a service agreement, either the original or a copy must be

A

Delivered promptly to your brokerage

You must also submit a copy of the agreement to your client

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20
Q

Before rafting a service agreement

A

It would be prudent to meet with your client to determine what services they are looking for, and what, if any concerns they want to ensure are addressed in the agreement

You can draft a service agreement that reflect your clients best interests and ensure that the services you are providing are tailored to them

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21
Q

Whenever there is a change to the agreement

A

It must be amended in writing and signed by all parties

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22
Q

Remuneration

A

Remuneration

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23
Q

One of the key elements in the service agreement will be

A

The remuneration being charged for the services you are rendering on behalf of your brokerage

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24
Q

It is important to have discussions pertaining to remuneration

A

Before any agreement is signed

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25
Q

Your client must understand how much they are being charged

A

As a prudent licensee, you should also identify any potential or anticipated costs that they may incur, such as for a property inspection, taxes or for legal fees, before the agreement is signed

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26
Q

Is there a standard amount charged?

A

there is no standard amount charged in the industry

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27
Q

Advising your client that such a standard exists could put you offside of

A

Federal competition laws

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28
Q

Each client is free to negotiate their commission with the brokerage

A

Which is through you

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29
Q

Electronic Signatures

A

Electronic Signatures

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30
Q

Electronic agreements and the use of signatures written onto an electronic tablet can create enforceable agreements

A

Whether these are service agreements (listing agreement, rental property management agreement) or contracts of purchase and sale of real estate

So as long as the essential elements of a contract are clear and the parties have agreed to those

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31
Q

The Law and Equity act requires that

A

In order for a contract of purchase and sale for real estate to be enforceable it must, in most circumstances, be in writing and signed by the party to be charged

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32
Q

Inducement representation as to service agreements

A

Inducement representation as to service agreements

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33
Q

An inducement representation is a

A

Promise you make to a potential party to a service agreement that you will engage in some act or provide some service so as to convince them to continue with or enter into a service agreement with you and your brokerage

34
Q

Example of inducement

A

An offer of a gift card to a consumer if they decide to use you as their licensee

35
Q

You must not make an inducement representation unless at the time yo deliver a statement to the consumer, you clearly set out the details of the inducement representation and

A
  • It is signed by you and the consumer you are inducing

-Sets out all the details of the inducement representation

-I a service agreement is entered into after the inducement is made, it must record the inducement representation

36
Q

Buyer’s Agent Exclusive Contract

A

Buyer’s Agent Exclusive Contract

37
Q

The Real Estate Services Rules require written service agreements when selling a property

A

However, there is no rules requiring one when assisting a buyer with the purchase of a property

38
Q

While not mandatory,

A

Buyer agency agreements allow you to be clear and transparent with your clients about what services you and your brokerage will be offering, how remuneration will be determined and what amount will be earned by the brokerage

39
Q

Buyer agency agreements also include terms that are important to them

A

Those terms may reflect legal instructions requiring you to look into issues that may impact your clients interest in a property, such as deaths on the property or whether it was a former grow-up

40
Q

Sellers Fee Agreement

A

Sellers Fee Agreement

41
Q

The Seller’s fee agreement acknowledges no agency representation

A

Between the seller and the brokerage and describes how the licensee will receive payment from the unrepresented seller

42
Q

Contract of Purchase and Sale (CPS)

A

Contract of Purchase and Sale (CPS)

43
Q

Unlike the service agreement,

A

Neither you or your brokerage are a party to the CPS

44
Q

The CPS is what?

A

A contract between a seller and a buyer involved in the sale and purchase of real estate

45
Q

What does the CPS outline?

A

All aspects of the transaction, including the price, the terms and conditions, the dates and inclusions and exclusions, the deposit and other required information

46
Q

The purpose of the CPS is

A

To ensure all essential terms of the agreement between the buyer and the seller are clearly set out, so the contract will be in accordance with common law and statutory requirements

And that the contract will satisfy disclosure requirements set out in the Real Estate Services Act and the Real Estate Services Rules

47
Q

Who completes the CPS?

A

The CPS is completed by the buyers licensee based on the terms and conditions requested by the buyer

once completed, it is presented to the seller by either the buyers or the sellers licensee

48
Q

Understanding the Terms of the Standard Form Contract

A

Understanding the Terms of the Standard Form Contract

49
Q

Most licensees use the standard form

A

Contract of Purchase and Sale for residential transactions

This contract has pre-drafted terms which allow you to fill in the information specific to your client such as their name, address, and the address of the property they are making an offer on

50
Q

You must ensure that the contracts address all material issues to ensure that there is no confusion as to the nature of the contractual terms

A

And to make certain that all contracts are valid and enforceable

51
Q

It is important to remember, as you complete the CPS to:

A

-Make sure that the signed CPS reflects unambiguously the terms and conditions to which the parties have agreed

-Ensure that all applicable clauses are included in the body of the contract to address all issues of importance to the parties

-Ensure that all required information regarding the identity of the buyers and the sellers is recorded on the CPS

-Ensure that the seller’s residency is recorded accurately and is current

-Make sure that you have accurately indicated who the licensee(s) are for each party

52
Q

Your Role in Drafting the Contract

A

Your Role in Drafting the Contract

53
Q

One of your most important functions is to

A

Prepare an enforceable Contract of Purchase and Sale that reflects the agreement between the seller and buyer

54
Q

Steps to consider / complete prior to drafting the CPS:

A

1) You must verify your clients are who they say they are

2) Prior to drafting, discuss FINTRAC and that you are required by law to ask for, and verify, their personal information

3) You are required to obtain, record, and retain on file the information given which must include proof of identity, birth date and occupation.

4) Proceeds of crime and terrorist funding act also requires the report of how they got the funds

5) Determine whether the buyers require financing for the purchase of the property

55
Q

Assignment of the Contract of Purchase and Sale

A

Assignment of the Contract of Purchase and Sale

56
Q

What is an assignment?

A

Is the transfer or benefits, interests and rights under a contract from one party (the assignor) to another party (the assignee)

57
Q

In BC, without a contractual term to the contrary, contracts of purchase and sale (CPS) lease agreements, and third party agreements

A

are assignable without the consent of he other party to the contract

58
Q

The most common use of assignment in the real estate context occurs when a buyer,

A

having entered into a CPS with a seller, transfers their benefits, interests, and rights under the CPS to a third party, prior to the completion date

59
Q

In BC, two types of assignment are enforceable

A

1) Legal assignment (aka absolute assignment)

2) Equitable assignment

60
Q

To qualify as legal assignment:

A

-The assignment must be absolute, meaning that is is unconditional

The assignment must be in writing

The assignment must be signed by the assignor

Express written notice of the assignment must be given to the other party of the contract

61
Q

Legal or absolute assignments require that written notification is provided to the other party to the contract

A

However, without a contractual term to the contrary, there is no requirement that the other party provide their consent to the assignment

62
Q

Assignments that do not fulfil the statutory criteria set out above

A

are known as equitable assignments

63
Q

As a result, the only way equitable assignments may be enforced is by commencing a lawsuit against all parties to the contract

A

including the original parties and the assignee

64
Q

Regulation (RESA) Regarding Assignments and the Notice to Seller Regarding Assignment Terms

A

Regulation (RESA) Regarding Assignments and the Notice to Seller Regarding Assignment Terms

65
Q

The real estate services regulation requires that the standard assignment terms

A

be included in every CPS prepared by a licensee, except where the client provides express written instructions to the contrary

66
Q

Unless otherwise instructed, all purchase contracts must include the following terms

A

-The contract must not be assigned without the written consent of the seller

-The seller is entitled to any profits from an assignment of the contract by the buyer or any subsequent assignee.

67
Q

the required notification to the seller when you do not include the required assignment terms must indicate

A

-whether the contract may be assigned

-If the contract may be assigned, it must advise about any conditions on the rights of assignment of the contract and the seller’s entitlement to profit resulting from assignment

68
Q

The rules of assignment does not apply in relation to a contract for the sale of a development unit by a developer under

A

The Real Estate Development and Marketing (REDMA)

69
Q

When acting for a developer in the context of a pre-sale contract, licensees must ensure that the following is included in the pre-sale contract

A

-Without the developer prior consent, any assignment of this purchase agreement is prohibited

-an assignment under REDMA is a transfer of some or all of the rights, obligations and benefits under a purchase agreement made in respect of a strata lot in a development property

-Each proposed party to an assignment must provide the developer with the information and records required under REDMA

70
Q

Your Role in Drafting the Contract

A

Your Role in Drafting the Contract

71
Q

Document Retention

A

Document Retention

72
Q

All brokerages in BC are

A

Required to retain transaction records relating to trades in estate for SEVEN Years

73
Q

a

A

a

74
Q

a

A

a

75
Q

a

A

a

76
Q

a

A

a

77
Q

Documents Related to Referrals Fees Paid or Received

A

Documents Related to Referrals Fees Paid or Received

78
Q

The Real Estate Services Rules declare that on a BCFSA required form, whenever your brokerage receives a referral fee, it must prepare and maintain the following information

A

-The amount of the referral fee
-The date the brokerage received the referral fee
-A description sufficient to identify the activity of the brokerage or related licensee for which the referral was received
-The name of the person who paid the referral
-The name of every person to whom any amount of the referral is paid, and date they were paid

79
Q

General Records

A

General Records

80
Q

Real Estate Services Rules require that you provide original or copies of records to your brokerage

These records include

A

-Written disclosures

-Written service agreements and any other record that establishes the scope of authority of the brokerage respecting the provision of trading services to a client

-Financial reports

-Notices related to assignment of contracts

81
Q

A prudent licensee will retain documentation in case it is needed to

A

support their position where there is a complaint or civil litigation

UBC Applied Course (5 decks)

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