From the buyer’s perspective, the subject removal period should be as short as possible. Although the Strata Property Act does not address the repayment of such funds, many strata corporations will pay out the funds to the current owner as if the funds were a repayment of an excess special levy. This document is useful as a starting point for buyers to begin their due diligence process. The Homeowner Protection Act  — will open in a new tab provides for certain permitted exclusions from warranty coverage due to, among other items, non-residential use, illegal activity (including cannabis growing operations) and failure to properly maintain the premises. Similar to clauses that permit the buyer to sell its property, a clause can be used that permits the buyer time to sell the chattel. The principal balance may be paid at any time, in whole or in part, upon payment of an additional (number of months) months’ interest as a penalty and by way of compensation for said prepayment. ), the seller should be made aware that retaining these rights or benefits should be negotiated with a prospective buyer. The Homeowner Protection Act creates certain warranty insurance disclosure requirements for warranty providers, but does not place any requirement on future owners to ensure that they provide details on the home warranty insurance to subsequent buyers. This condition is for the sole benefit of the Buyer. The lien provides some level of security for the lien claimants to ensure they get paid. ***Use an authorization form such as the “Authorization to Agent to Obtain/Deliver Documentation” for this purpose. Your realtor can be extremely helpful here by setting up both listing and selling contracts with the right conditions to protect Buyers and Sellers. This clause does not bind the conveyancer to hold the funds in trust as a stakeholder pursuant to the provisions of RESA because the conveyancer is not a party to the Contract of Purchase and Sale. The Real Estate Development Marketing Act defines a cooperative association as. It is not uncommon, for example, for duplex owners to deny that they are part of a strata corporation and thus fail to hold general meetings, approve budgets and maintain operating and contingency reserve funds. Licensees have an obligation to avoid error, misrepresentation or concealment of pertinent facts. NOTE: A survey of owner-builders conducted in 2007 found that the majority of purchasers of owner-built homes did not receive a disclosure notice and did not know whether or not their home had home warranty insurance. Licensees need to be aware that back-up contracts, while useful in some cases, can create serious problems when the contractual limitations and obligations of each party are not properly explained to all parties. Frequently, the function of the licensee is to put into an agreement format those things that have already been discussed and agreed to by the parties. This contract is for the purchase of (number of shares) shares in (name of co-operative association) together with a lease of (unit number) to the Buyer, and other considerations as may accompany said lease. Does it test at the levels necessary to satisfy the buyer’s needs? The holdback can be used to pay out the lien claimant or paid into court to discharge the lien. What would you have done to prevent this situation? In addition, the Notice to Mediate (Residential Construction) Regulation allows any party to a Supreme Court action involving a residential construction dispute to compel the other parties of the dispute to a structured mediation session. (viii) Buyer has not Received or Reviewed the Documentation. It is recommended that this provision be included in the Contract of Purchase and Sale whenever the seller and/or a private investor will be carrying or advancing mortgage money. The benefit to the Seller is that they have greatly increased the likelihood their home will sell. (v) Home Warranty Insurance on Resale Homes. If a buyer chooses not to have an inspection, the agent’s advice to do so should be documented. The end result may be a collapsed transaction, the buyer’s deposit may be at risk, and the seller may suffer losses as a result of the transaction not proceeding. Whether a real estate licence and its attendant Errors and Omissions Insurance will allow a licensee to engage in the sale of property other than real estate is not a matter to consider lightly. A seller who is planning on acquiring another property, based on the sale of an existing property, may also want to familiarize himself or herself as to the portability of his or her existing mortgage and any terms, conditions and time limitations that may apply. Additionally, listing licensees may wish to include the following clause in the Contract of Purchase and Sale when selling these properties but care must be taken to ensure the strata corporation is “non-compliant” prior to using the following clauses or some variation thereof. For further information, contact CMHC at 1-888-463-6454 or visit www.cmhc-schl.gc.ca  — will open in a new tab. NOTE: Following amendments to RESA in 2015, unless the money received is cash, a separate written agreement is no longer required, so long as the brokerage takes no action in relation to the money other than to deliver it to the person to whom it is payable. The Parties will, immediately after completion of the walk-through inspection, complete a deficiency list of mutually agreed upon items that are to be remedied by the Seller (the “Deficiency List”). One of the significant differences is that there are certain triggering events which, when they occur, oblige the trustee to release the deposit to the developer. Subject to the Buyer receiving and approving the list of assets on or before (date). ”Subject to sale” clauses used to be commonplace in property transactions a few decades ago - in fact, when we spoke to John Ross of The Professionals, he recalled a situation from the 80’s with a ‘chain’ situation involving five individual property deals, each connected through consecutive buyers having to sell their current home before they could buy their desired home. A buyer of property where a wood burning device is included should be made aware of the previously mentioned factors and the following notation should be included in the Contract of Purchase and Sale: The Buyer acknowledges and accepts that the (select either wood stove or fireplace insert and/or chimney) installed on the property may not be approved for legal use and may render any fire insurance void. Licensees must be aware that courts have sometimes declared vague mortgage clauses to be unenforceable whim and fancy clauses. It is recommended that the seller’s representative do a title search on the land containing the rental pad to ascertain ownership and the presence of any head leases or options which could have an impact on future rents to be charged. These are long-term leases (often 99 years). A buyer and seller may enter into a confidentiality agreement prior to the presentation of an offer whereby each would agree not to disclose the terms and conditions of any offer or counter-offer to another buyer interested in the property. ** This is the ‘‘market ’ rate (i.e., what the Lender wants). Where a special levy will likely be approved before the completion date, a licensee may use one of the following two clauses: If a special levy is approved before the completion date, the Seller shall credit the Buyer with the entire portion of the special levy that the Buyer is obligated to pay under the Strata Property Act and the Seller hereby directs the Buyer’s lawyer or notary public to hold back such credit from the sale proceeds and to remit it to the strata corporation. Real Estate Development Marketing Act, (See also information regarding strata properties.). Home warranty insurance stays with the property. Accordingly, licensees involved in the sale or purchase of a shared interest in land by or from a developer should familiarize themselves with the content of and the requirements associated with the Disclosure Statement. This clause is usually included in a subject to sale offer. A leasehold unit is a unit in a residential leasehold complex which is defined as containing one or more buildings capable of being used for leasehold residential purposes other than buildings comprised of strata lots, cooperative interests or shared interests in land. The permission may be renewed and may be made subject to the same or different conditions. In a typical real estate transaction, the issue of fire/property insurance is not addressed until after the conditions are removed and, in some cases, closer to completion date. This clause is usually included in a subject to sale offer. If the seller does not have a copy of the sublease, the buyer’s agent should recommend that the buyer obtain legal advice to ensure that the buyer will be entitled to the use of the parking stall(s)/storage locker(s) that are used by the seller. Small strata corporations tend to be less familiar with the requirements of the legislation, and in some cases may deny that the legislative provisions are applicable. https://www.vernonrealestate.ca/wp-content/uploads/2020/03/Vernon-Real-Estate-Logo-2020-2.png, © Copyright - Doug Cuthbert | RE/MAX Vernon, 5603 27 Street, Vernon, BC V1T 8Z5 | Mobile: 250-550-4203 Office: 250-549-4161, Okanagan Beaches, More Options Than You Thought. Excerpt from Trading Services | Section 9. The time clause states that in the event the Seller receives another acceptable offer the Buyer or the Buyers’ agent will receive written notice that they must remove all their “subject to” clauses from the purchase contract, or forfeit the deal. At the time of listing a property, it is a prudent practice for licensees to discuss with a seller their obligation to clear title and the nature of the expenses they will face at closing. Licensees should also be aware that many financial institutions have lending restrictions they may apply to properties that have been used for illegal cannabis growth operations or the manufacture of illegal substances. This warranty shall survive and not merge on the completion of this transaction. If the landlord withholds consent, the tenant should seek legal advice. Licensees may find the following adapted versions of the clauses useful in the sale of strata lots. When it comes time to draft a contract, the simplest way may be to treat a trade item other than land as though it were cash. Suitable forms may be available for commercial transactions from board/association offices. In some cases, parking spaces may be designated as a separate strata lot. The Heritage Conservation Act is concerned with activities that may alter heritage sites automatically protected under the legislation. Sellers may need to obtain a ruling from the local GST office on what constitutes ‘‘substantial’’ and keep a record of the official who rendered that opinion. The following wording has been added to the first page of the Contract of Purchase and Sale: If the Buyer fails to pay the deposit money as required by this contract, the Seller may, at the Seller’s option, terminate this contract. If the Canada Revenue Agency disallows all or any part of the rebate claimed, the Buyer will immediately, upon receiving a written demand from the Seller, reimburse such disallowed amount to the Seller together with any interest and penalties that the Seller is required to pay under the Excise Act as a result of such disallowance. The wood burning unit must be installed with clearances and a non-combustible base that complies with municipal and/or insurer’s specifications. The instruction here does not apply to any other generic disclosure statements produced elsewhere. When such funds are received a strata corporation may decide that some or all of these funds are to be returned to the owners. Purchase price includes all assets, goods and chattels listed as included in the sale of the business, according to the attached schedule, except inventory on hand. If the buyer is unsuccessful in obtaining fire/property insurance, the mortgage company is not protected and will not provide mortgage funds. If the licensee were to pay, the inspector could be suspected of not wanting to jeopardize the transaction of the person paying him or her, who might or might not ask for his or her services in the future, depending on the conclusions of the inspection report. In addition, licensees should be aware that their Real Estate Errors and Omissions Insurance Indemnity Plan excludes coverage for licensees when they are either buying or selling real estate. If the RAR applies to a property, the local government will require the riparian area and development to first be assessed by a Qualified Environmental Professional (QEP) such as a Registered Professional Biologist (R.P.Bio.) Another type of ownership, which fits between cooperative and strata on leased land, is the rental lease, where the cooperative building sits on leased land. Subject to Sale and Unconditional. failed to advise the sellers to obtain independent legal advice before entering into the Contract of Purchase and Sale. If the buyer has entered into a Contract of Purchase and Sale, the following subject clause may be used to allow time for the contract to become unconditional: Subject to the sale of the Buyer’s property at (address)becoming unconditional on or before (date). If the chattel is valuable and saleable, why not consider a clause that allows the buyer to sell the item in question? the offer contains the Standard Assignment Terms; the offer is silent with respect to assignments; or. You should document having provided this advice. The Seller will take back a second mortgage, in a form acceptable to the Seller (which form will be provided by the Seller on or before (date), and approved by the Buyer on or before (date), in the amount of (amount) at an interest rate of __ % per annum, calculated (select either half-yearly or monthly), not in advance, with a ___-year amortization period, ___ -year term and repayable in blended payments of $ (payment) per month, including principal and interest (plus 1/12 of the annual taxes if required by the Seller, if not already being collected by the first mortgagee). The Buyer acknowledges and accepts that the property may not receive approval for an onsite sewage system and that no representations to the contrary have been made by either the Seller or his or her agent. This clause may also be used for the purchase of rental-lease properties but it is strongly recommended that the buyer seek legal advice and ensure understanding of the head lease’s restrictions and duration. The Consent Order entered into between RECBC and the licensee provided that the licensee. Under RESA, the need for disclosure includes: The need for disclosure arises whenever a licensee is disposing of real estate, regardless of whether the licensee has personally listed the property for sale. The Seller will promptly deliver a copy of the relevant resolution or notice of resolution to the Buyer. The risk is in selling the property to both buyers simultaneously! Licensees are also advised to consult their financial advisers, including experienced mortgage brokers, for guidance in such financing, as well as ascertaining from the cooperative’s rules and regulations whether or not there is a prohibition on financing in any way. Insurance companies are more frequently declining applications for insurance coverage from individuals who have a bad insurance claim history. At the time of sale, the buyer may require a number of conditions which are peculiar to manufactured homes on rented pads. The standard Contract of Purchase and Sale automatically takes account of some exceptions to a seller’s obligation to provide clear title. The listing should indicate that the area in question is common property and that the seller has a sublease to a specific parking stall/storage locker. With respect to the Contract of Purchase and Sale dated(Contract) in respect of the Property, the Seller and Buyer agree that(Licensee), is not required to deliver monies received from the Buyer or Seller pursuant to the Contract to the Brokerage pursuant to section 27(1) of the Real Estate Services Act nor is the Brokerage required to deposit those monies in its brokerage trust account pursuant to section 27(2) of the Real Estate Services Act. A sale of real estate property may be deemed subject to the sale of another property. Sound complicated? Immediately upon acceptance of this offer or counter-offer, the Seller will authorize the (Seller’s/Buyer’s) agent, to request***, at the (Seller’s/Buyer’s)† expense, complete copies of the documents listed above from the strata corporation or other source and to immediately, upon receipt, deliver the documents to the Buyer (or the Buyer’s agent). A contract assignment occurs when a buyer transfers the contract to buy property to someone else before the completion date. Examples of this might occur when penalties are applied for the early pay-out of a mortgage, interest has accumulated if mortgage payments have fallen into arrears, or if a lien against the property is unsatisfied. Claims the Parking Stall/Storage Locker was Purchased. If a licensee intends to refer clients to a property inspector, the safest way to do so is to provide a list of at least three professionals with whom the licensee, or others he or she knows, has dealt and have the client call, interview, and select them independently. If there is a new home warranty provided as part of the transaction, the buyer may also pursue a claim through the new home warranty provider. This condition is for the sole benefit of the Buyer. As outlined previously, licensees should obtain the minutes of the strata corporation’s last Annual General Meeting, and any strata council meetings held in the interim, and deliver them to the buyers along with the amended bylaws. (c) a statement containing a list of fixtures, goods, chattels, rights and other assets relating to or connected with the business that are not included in this transaction, on or before (date). Where the listing licensee has not already obtained the documents, such that the listing licensee must now request them from the strata corporation, it may take up to 18 days for subject removal. On the other hand, a patent defect is one that is readily visible and/or obvious upon ordinary inspection. Now, either receiving yet another offer on their own home or the Buyers’ home selling will result in a sale. For further information, refer to the BC Housing, Licensing and Consumer Services website  — will open in a new tab. Many developers/builders have their own preprinted GST clauses. The Superintendent of Real Estate has advised that his opinion is that RESA applies to the sale of real estate on First Nations property. Licensees may wish to consider the following questions when listing a property with an onsite wastewater treatment system: The Sewerage System Regulation (SSR), which came into force on May 31, 2005, covers onsite wastewater systems that: The SSR requires that records of the construction of the onsite system, and of any subsequent alterations to it, be filed with the local health authority. As a licensee acting for the seller of a property with an installed onsite wastewater treatment system, you should obtain the pertinent records from the local health authority in order to verify that: Wastewater treatment systems may be subject to periodic inspections by the local government or the health authority may have issued a work order for a particular system. Licensees should also note that only one RP can be registered on a title. The principal balance may be paid at any time, in whole or in part, without notice, bonus, or penalty. Accordingly, most, if not all, aspects of the law governing landlord and tenant relationships will apply and licensees should be aware of their duties and responsibilities, which apply to all lease transactions. When a property is connected to a municipal or community water supply, water is often taken for granted. This subject locks up your property under contract and you could be in a situation where it takes months for that buyer to sell … If the wrong advice is given, the licensee may be liable for any problems that might arise as a result of incorrect advice. A clause such as the following should be used when a seller wishes to have the buyer with the first accepted offer remove all conditions or withdraw in order for an accepted back-up offer to move into first position. The Seller will allow access to the property for this purpose on reasonable notice. However, if a cash deposit is to be given to a licensee so that that licensee can deliver the cash to the person who is to hold it, another step is necessary. §NOTE: The use of this or a similar clause in the Contract of Purchase and Sale does not replace the requirement to have made such a disclosure on a separate document prior to the offer being accepted. (a) a watercourse, whether it usually contains water or not; (c) a ditch, spring or wetland that is connected by surface flow to something referred to in paragraph (a) or (b); GST over purchase price; rebate to buyer; and. (6) Sale Price Insufficient To Cover Financial Encumbrances. The request for consent to assign and request for consent to sublet forms are available in Residential Tenancy Offices and on the RTO website  — will open in a new tab. In the event that a strata plan has not been registered at the time that a sales contract is executed, licensees should include in the contract a clause such as the following: It is a fundamental term of this contract that a strata plan for the property, in the form provided to the Buyers at the time of signing this contract and attached as addendum, is fully registered in the appropriate Land Title Office on or before the Completion Date. government; or, for any wastewater treatment system installed after May 2005, that it was installed by an authorized person as defined in the Sewerage System Regulation and a Letter of Certification was filed with the local health authority; and. New Construction. Of course, the above-noted clauses can be amended or worded to fit a particular situation. Section 5-7 of the Rules defines ‘‘associate’’ as follows: The definition of ‘‘associate’’ is broad. Though the seller can remove financial charges like mortgages, judgments and liens, non-financial charges usually stay on title despite changes of ownership. In such cases, both the Real Estate Development Marketing Act and the Securities Act apply. Under certain circumstances, a substantial payout penalty may be avoided by the buyer arranging a new mortgage through the existing mortgagee. If the system requires upgrading, all regulatory filing provisions apply, including plans, specifications and a site evaluation with report. Subject to the Buyer receiving, perusing and being satisfied with: (a) a profit and loss statement showing the revenue and expenses of the business for a period of 12 months ending not more than 120 days before the signing of the agreement; (b) a statement of assets and liabilities; and a permit/letter of certification respecting the System is on file with the local health authority. Subject to the Buyer being able to arrange on or before (date) a lease for the premises satisfactory to the Buyer. For details, see Documents to Request and Their Significance. Provision for future escalation in rents or lease payments between the landowner and lessee may come as a surprise to inadequately informed tenants. On April 1, 2013, the Harmonized Sales Tax (HST) was replaced by the federal GST and the BC Provincial Sales Tax (PST). Acting For Sellers. The results of the test indicated that no (describe condition) was present (select either in or on) the (select either building or property) . For example, restrictions relating to Riparian Areas Regulation  — will open in a new tab under the Fish Protection Act  — will open in a new tabor archaeological sites under the Heritage Conservation Act  — will open in a new taband others that are not currently registered on title may have substantial impact on use or value. These sites are more likely to be clustered around existing urban areas, major rivers or other waterways, and other areas that are most attractive for human habitation. This blog discusses the type of subjects that are common when writing an offer, so that you know how to write a contract properly. The Strata Council has the authority under the Strata Property Act to permit an owner or a tenant to use common property. Authorization To Pay Trust Money to Conveyancing Lawyer or Notary. To clearly state that the PDS is incorporated into the Contract of Purchase and Sale, the following clause must be inserted into the contract: The attached Property Disclosure Statement — Strata Title Properties dated (date) is incorporated into and forms part of this contract. Because the standard residential Contract will not be used for a commercial transaction, licensees should consider whether the subject clauses used in the contract are overly subjective. (parking, storage, etc.) Because the standard Contract of Purchase and Sale contains an option clause and is executed under seal, when using a standard Contract of Purchase and Sale, the seller is irrevocably bound by the contract even if the subject to financing clause is vague. All work on onsite systems, such as repairs to systems, and any maintenance on systems, must be performed by an authorized person. Some buyers may not qualify for the rebate and there is a ceiling to the value of the rebate. The licensee must not assume that all leases or rental agreements from a common landlord are identical. Licensees should recommend a subject removal date that allows enough time for the strata corporation or strata manager to receive and respond to a request and for buyers to review the records provided by the strata corporation. It is important to remember that, the use of parking stalls or storage lockers by the seller does not necessarily mean that they will be available for the purchaser. Determine whether your buyer had any prior experience with wells. Notice to Seller Regarding Assignment Terms, Contract Assignments: What to do When You Need to Add or Change a Buyer, Office of the Superintendent of Real Estate, Real Estate Errors and Omissions Insurance Corporation, www.env.gov.bc.ca/habitat/fish_protection_act/riparian/documents/applicable_regulations_table.pdf, www.env.gov.bc.ca/habitat/fish_protection_act/riparian/riparian_areas.html, www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html, Manufactured Home Park Tenancy Regulation, Applied Science Technologists & Technicians of BC, Onsite Wastewater Consumer Information Centre, Association of Professional Engineers and Geoscientists of BC, Receipt of Strata Corporation Documentation Form, Documents to Request and Their Significance, Approval by Seller's/Buyer's Accountant Clause, Buyer to Approve Documents in Sale of Business Clause, Authorization to Pay Trust Money to Lawyer or Notary Clause, Deposit Payable within a Specified Period Clause, Lawyer Approval of Deposit Arrangement Clause, Buyer Approving the Property Disclosure Statement Clause, Buyer's/Seller's Acknowledgement of Licensee's Interest in Trade Clause, Buyer's Approval of Property Disclosure Statement - Strata Title Properties Clause, Disclosure of Material Latent Defect Clause, Growth or Manufacture of Illegal Substances Clause (for use with non-strata properties), Growth or Manufacture of Illegal Substances Clause (for use with strata lots), No Growth or Manufacture of Illegal Substances Clause (for use with non-strata properties), No Growth or Manufacture of Illegal Substances Clause (for use with strata lots), Possible Safety, Health or Environmental Condition Clause, Property Disclosure Statement — Strata Title Properties Clause, Seller's Disclosure Where Condition Has Been Tested Clause, Seller's Disclosure Where Condition Has Been Removed Clause, Seller's Disclosure but Corrective Measures Taken Clause, Seller's Disclosure but Condition at Acceptable Level Clause, UFFI and Asbestos Insulation Disclosure Clause, Agreement for Sale (With No Underlying Mortgage Which Allows Resale) Clause, Agreement for Sale (With Underlying Mortgage) Clause, Financial Obligations Exceed Sale Price Clause, Lawyer's Approval of Financing Terms Clause, Open (Prepayment in Part) Mortgage Clause, Open (Prepayment in Full) Mortgage Clause, Optional Assumption of Portion of Mortgage Clause, Refinancing with Existing Mortgagee Clause, Seller to Take Back First Mortgage Clause, Seller to Take Back Second Mortgage Clause, Seller to Pay Discount to Buy-Down Rate for Buyer Clause, Subject to Franchisor Approving Assignment of Franchise Clause, Subject to Buyer Approving Franchise Agreement Clause, Purchase Price to Include/Not Include GST Clause, Receipt of Information or Professional Advice by Buyer/Seller Concerning GST Liability Clause, Licensed Builder and Warranty Insurance Clauses (Option I), Licensed Builder and Warranty Insurance Clauses (Option II), Receipt of Home Warranty Insurance Documents Clause, Receipt of Owner-Builder Disclosure Notice Clause, Inspection/Testing/Government Approval Clause, Wood Burner Insurance Confirmation Clause, Approval by Seller's/Buyer's Lawyer Clause, Properties Containing Unauthorized Accommodation Clause, Buyer's Approval of Rules and Regulations of Manufactured Home Park Clause (Option I), Buyer's Approval of Rules and Regulations of Manufactured Home Park Clause (Option II), Buyer's Permission to Register a Security Interest in a Manufactured Home Clause, Seller's Permission to Sublet a Pad for a Manufactured Home Clause, Friend/Relative Approval (for Buyer or Seller) Clause, Seller Taking Buyer's Property in Trade Clause, Licensed Builder and Warranty Insurance Clauses, Mandatory Warranty Insurance Coverage Clause, Walk-Through Inspection Deficiency List Clause, Assessing Property for Wastewater Treatment System Clause, Seller Sewage System Representation and Warranty, Wastewater Treatment System Does Not Meet Standards Clause, Buyer's Approval of Property Disclosure Statement—Strata Title Properties Clause, Nature of the Parking Stall(s)/Storage Locker Needs To Be Verified Clause, Notification of Changes in Bylaws or Rules Clause, Properties without a Strata Council Clause, Recovery of Proceeds Payable to Strata Corporation Clause, Seller Agrees to Hold Back to Pay for Special Levy Approved Before Completion Clause, Seller and Buyer Negotiate the Portion of the Special Levy Due after Completion that the Seller Will Pay Clause, Seller Agrees to Hold Back a Portion of the Purchase Price Where There is the Possibility of a Special Levy Being Assessed in the Near Future Clause, Strata Plan Not Registered at the Time Contract Signed Clause, Strata Documentation to Be Provided Clause, Confirmation of the Sale of Buyer's Property Clause, Sale of the Buyer's Property, with Time Clause, Subject to Seller Purchasing Residence Clause, Buyer's Approval of Title and Title Search to Be Incorporated into Contract Clause, this contract must not be assigned without the written consent of the seller; and.

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