Buying or selling a vacant lot?

Before entering into a brokerage contract for a vacant lot, real estate brokers must systematically verify the zoning by-law to determine the intended use of the lot because different rules apply depending on whether the vacant lot is used for residential or commercial purposes.

Vacant residential lot

Vacant residential lot is part of the residential properties referred to in section 23 of the Real Estate Brokerage Act since it was harmonized in May 2024 with the rules of the Civil Code of Québec, which define land as an immovable asset.

Therefore, in a transaction involving this type of vacant lot, you must follow the rules applicable to residential immovables, including the use of mandatory forms developed by the OACIQ.

a) Written brokerage contract and the mandatory OACIQ form (s. 24 of REBA)

In the case of land intended for residential construction, the broker must sign a written contract with the client on one of the following mandatory forms:

Sale:

• Exclusive brokerage contract – Sale – Chiefly residential immovable containing less than 5 dwellings excluding co-ownership (EBCS); or
• Non-exclusive brokerage contract – Sale – Chiefly residential immovable containing less than 5 dwellings excluding co-ownership (NEBCS); and
• Declarations by the seller of the immovable – Chiefly residential immovable containing less than 5 dwellings excluding co-ownership (DS).

Purchase:

• Exclusive brokerage contract – Purchase – Chiefly residential immovable containing less than 5 dwellings excluding co-ownership (BCP).

Adjustments to make to the form Declarations by the seller (DS)

The broker must inform the selling client of his obligation to fill out the Declarations by the seller on the immovable (DS) form in the event of a transaction concerning the sale of land intended for residential construction. The adjustments must be made depending on each individual case. 

Keep in mind that the term “immovable” used in this form includes land.

Thus, in the case of land that is undeveloped and contains no foundation, answering the questions on the DS form that pertain directly to buildings would be unnecessary.

D2. General Information: questions D2.2 to D2.7
D3. Land (Soil): question D3.2 (if there is no foundation)
D4. Damage Caused by Water
D5. Basement and Foundation
D6. Undesirable Animals (vermin)
D7. Interior Air Quality
D8. Roof
D9. Plumbing and Drainage: questions D9.1 to D9.7; D9.11 to D9.13
D10. Energy: questions D10.2, D10.4 to D10.8
D11. Telecommunications: question D11.2
D12. Heating, Air Conditioning and Ventilation

The broker must add a note to that effect in section D15 – Details of the DS

IMPORTANT: You must therefore assess every situation, and depending on the context, decide whether or not a question on the DS form must be answered.

For example, you may not ignore the questions connected with the constructed building, even if it is for the sale of a “building for demolition”, where the interest is in the land.

In the case of a burned building, you must assess whether the foundations still exist and, if so, the questions regarding the foundations must be answered.

b) Promise to purchase on the OACIQ mandatory form

Brokers must use the mandatory form Promise to purchase – Chiefly residential immovable containing less than five dwellings excluding co-ownership (PP) for this type of transactions.

c) Mandatory annexes

In a transaction involving residential land, brokers must also use the mandatory annexes for immovables containing 5 dwellings and less, for example: Enhancements prior to acceptance (EA), Annex RC – Remuneration and Costs (RC), Annex F - Financing (AF), Annex R - Residential immovable (AR), etc.

IMPORTANT: The broker may not represent both the buyer and the seller in a transaction involving residential land.  The rules prohibiting double representation apply.

Vacant commercial lot

As the rules governing residential properties do not apply to commercial properties, there is no mandatory form for the purchase or sale of commercial land. Therefore, three options are available..

Option 1

The OACIQ has provided brokers with recommended forms that can be used in these situations: Exclusive brokerage contract – Sale – Immovable (BCG) and Promise to purchase – Immovable (PPG) Under clause 8.4 of the BCG and clause 10.2 of the PPG, the broker must check the appropriate box to indicate if the seller has completed the Declarations by the seller of the immovable form (which is always recommended), or whether he chose to complete only the seller’s declarations contained directly in the brokerage contract form. In the latter case, declarations 1 through 10 must be completed to the seller’s best knowledge and entered as such in the PPG.

Option 2

The forms Exclusive brokerage contract – Sale – Chiefly residential immovable containing less than 5 dwellings excluding co-ownership (EBCS) and Non-exclusive brokerage contract – Sale – Chiefly residential immovable containing less than 5 dwellings excluding co-ownership (NEBCS) are not mandatory for the sale of a vacant commercial lot since they are not the most suitable for this type of transaction. These forms provide for the right of withdrawal, in accordance with section 28 of the Real Estate Brokerage Act, which is not mandatory for the sale of commercial land. In addition, the broker should make major changes by adding certain essential declarations by the seller of the immovable to clause 11.1, such as those listed under clause 8.4 of the Exclusive brokerage contract - Sale - Immovable (BCG) form. If not, the form Declarations by the seller of the immovable will have to be completed (which is always recommended) and attached to the brokerage contract form as an integral part thereof.

For purchase, the form Promise to purchase – Chiefly residential immovable containing less than five dwellings excluding co-ownership (PP) can be used by adding the seller's essential declarations on the immovable to clause 12.1. If the form Declarations by the seller of the immovable (DS) exists, it will have to be attached to the PP as an integral part thereof.

Brokers can use these forms by making the necessary adjustments, including the form title, if applicable, and the note at the beginning of the EBCS and NEBCS forms.

Option 3

The broker may also choose to enter into an “in-house” brokerage contract or promise to purchase that complies with the current regulations and contains the clauses mentioned in this article.

Where appropriate under the circumstances, it should also specify whether the contract is exclusive or not and the fact that in some cases the contract cannot be terminated.

Verify the restrictions on brokerage licence

Finally, remember that the broker with a licence restricted to commercial brokerage may not engage in brokerage activities concerning a vacant residential lot (section 4 of the Regulation respecting the broker’s and agency licences). Conversely, the broker with a licence restricted to residential brokerage may not engage in brokerage activities concerning a vacant commercial lot (section 3 of the same regulation).