IMPORTANT: Promise to purchase forms (June 2021)

As part of the measures implemented to address the issues raised by the overheated housing market, the Ministry of Finance and the OACIQ have agreed, in June 2021, to amend the promise to purchase forms to reinforce the messages pertaining to the risks of waiving a pre-purchase inspection.

What are the amendments?

The amendments concern clause 8.1 (pre-purchase inspection) of the promise to purchase forms.

• An addition specifying that the buyer is informed by the broker of the risks of waiving inspection is intended to further raise the buyer's awareness and to ensure that this matter has indeed been discussed between the buyer and the broker. Remember that this is not a new obligation for the broker, who is required to inform the buyer of these risks if the inspection is waived. 

• Clause 8.1 will also contain a warning to raise the buyer's awareness that he should not waive the pre-purchase inspection, except in exceptional cases, such as the replacement or major renovation of the building.

How should the broker inform the buyer of the risks of waiving the pre-purchase inspection?

A broker must inform the party represented and all other parties to a transaction of any known factor that may adversely affect the parties or the object of the transaction. He must also reasonably inform all the parties to a transaction of the rights and obligations arising from the documents they sign, including the promise to purchase form (section 85 and 86 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising [ch. C-73.2, r.1]).

 As part of his professional obligations, the broker must recommend that the buyer have a full inspection of the property performed by a professional or a building inspector who:

• has professional liability insurance covering fault, error or omission
• uses a recognized inspection service agreement
• performs inspections according to recognized building inspection standards
• submits a written report to the party that requested the inspection services

(section 81 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising).

Should the buyer still wish to waive the pre-purchase inspection of the building (and/or the inspection of the common portions, if applicable), the broker must then:

• Inform the buyer that the pre-purchase inspection is an essential step in a real estate transaction
• Explain to the buyer that only an inspection carried out properly by a professional can uncover any apparent defects in the building
• Inform the buyer that if he waives the inspection, he may lose his recourse against the seller if an apparent defect is discovered after the conclusion of the sale
• Inform the seller that if the property is being sold without legal warranty of quality, the inspection is even more recommended because its process allows the seller's declarations to be completed in greater detail

Who is responsible for informing the buyer of the risks of waiving the pre-purchase inspection?

When the buyer is represented by a licensee, the latter is required to inform the buyer of the risks of waiving the pre-purchase inspection.

If the buyer is not represented, the seller's broker must fulfil this obligation with the buyer.

What are the forms amended in June 2021?

The French and English versions of the following mandatory forms:

• Promise to purchase– Chiefly residential immovable containing less than five dwellings excluding co-ownership (PP)
• Promise to purchase – Divided co-ownership– Fraction of a chiefly residential immovable held in divided co-ownership (PPD)
• Promise to purchase – Undivided co-ownership – Share of a chiefly residential immovable held in undivided co-ownership (PPU)
• Promise to purchase – Mobile home situated on leased land (PPM)
• Promise to purchase – Public Curator (PPC)
  • Annex – Undivided co-ownership – Public Curator (AUC)
  • Annex – Divided co-ownership – Public Curator(ADC)

The French and English versions of the following recommended forms:

• Promise to purchase – Immovable (PPG)

The coming into force of the amended forms

The new promise to purchase forms have been in force since June 22, 2021.

Electronic versions of the amended forms

The amended forms will be available via InstanetForms^TM.

Paper version of the amended forms

Note that the paper version of the amended promise to purchase forms is no longer offered. However, you will be able to print the paper versions via InstanetForms^TM.

Unusable promise to purchase forms

The previous version of the promise to purchase forms cannot be used since June 22, 2021.

There is no refund for unusable forms.