Billing in cases where clause R2.5 is used

Case where the seller is not represented 

You draft a Promise to purchase (PP) for your buying client, but the seller is not represented:

1. The price you indicate under clause 4.1 of the Promise to purchase will be the offering price including the remuneration, plus taxes, due to the buyer’s agency (or broker acting on his own account) under the Brokerage contract to purchase (i.e. the offered price to which will be added the amount of the remuneration plus taxes);
2. Under clause 13.1 of the Promise to purchase, it will be important to enter the number of Annex R – Residential immovable so that it forms an integral part of the PP;
3. Under clause R2.5 of Annex R – Residential immovable, you must enter the same percentage or amount indicated in the Brokerage contract to purchase;
4. You will need to explain to the seller and to your client that the price offered includes your share of remuneration, plus applicable taxes, and specify the share which the seller will receive once these sums are deducted, exactly the same as you would if you were the seller’s broker in a situation where there is no Brokerage contract to purchase. To make your task easier, the new version of the form will now include a section in clause R2.5 to break down the sums payable to the seller. Simply complete this section.

For billing 

The buyer's agency will issue an invoice on behalf of the buyer on which the remuneration indicated in the Brokerage contract to purchase will appear. This invoice will be sent to the notary.                   

Case where the seller is represented 

You are representing the buyer and you draft a Promise to purchase (PP) for your client and the seller is represented. If the remuneration offered to you as buyer’s broker by the seller’s broker is less than what is indicated in your Brokerage contract to purchase and your client wishes to finance the remuneration owing, clause R2.5 must be used.

You will then need to follow the six steps below:

1. The price you enter under clause 4.1  of the Promise to purchase will be the price offered, including the portion of remuneration indicated in the Brokerage contract to purchase that exceeds what you will receive as buyer’s broker (collaborator) and the taxes on this portion;
2. Under clause 13.1of the PP, it will be important to enter the number of Annex R – Residential immovable so that it forms an integral part of the PP;
3. Under clause 11.4, indicate the name of agency or broker acting on his own account who represents the seller;
4. Under clause R 2.5 of Annex R – Residential immovable, you will need to enter the same percentage or amount as indicated in the Brokerage contract to purchase;
5. You will need to explain to the seller’s broker and your client that the price offered includes your share of remuneration, plus applicable taxes, and specify the share which the seller will receive once these sums are deducted. To make your task easier, the new version of the form now includes a section in clause R2.5 to break down the sums payable to the seller. Simply complete that section;
6. The seller’s broker will have to bring to the attention of his selling client the fact that the latter must also subtract from the amounts indicated in clause R2.5 the remuneration amount provided in the Brokerage contract to sell binding them.

And billing?

Three invoices must be prepared in case the seller is represented and clause R2.5 is used:

1. The seller’s agency will issue an invoice on behalf of the seller on which the remuneration indicated in the Brokerage contract to sell will appear, as well as the remuneration sharing conditions with the buyer’s agency. This invoice will be sent to the notary.
2. The buyer’s agency will send an invoice to the seller’s agency to claim the share of remuneration due to it according to what was indicated in the description sheet.
3. The buyer’s agency will issue an invoice on behalf of the buyer on which the remuneration indicated in the Brokerage contract to purchase will appear. It will also indicate on the invoice the share received in remuneration sharing, which will be deducted from the total remuneration since it has already been claimed from the seller's agency. This invoice will be sent to the notary. 

Clause R2.5 specifies that the notary will be responsible for paying directly the buyer’s agency the remuneration indicated in the Brokerage contract to purchase, once the seller’s agency remuneration portion deducted, in accordance with the remuneration sharing agreement.