Taking the time with your real estate transaction so nothing gets overlooked
You’ve fallen in love with a property. Now you have to take the time to do things properly. Forgoing or neglecting important elements such as the building inspection, the legal warranty or the certificate of location in order to speed up the process can have serious consequences, not least in financial terms. Remember! Once your promise to purchase is accepted by the seller, it cannot be cancelled, except in a few rare cases.
ELEMENTS THAT SHOULD NOT BE OVERLOOKED
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Building inspection: an absolute mustWhether a property is new or pre-owned, an inspection is a must. All the information contained in the form Declarations by the seller of the immovable (DS for a residential immovable and undivided co-ownership and DSD for a divided co-ownership property) which the seller must provide is certainly very useful, as it reflects what the seller knows about the condition and history of his property. However, a property inspection will complete this information by going more in depth. In accordance with the Real Estate Brokerage Act and its regulations, and to make sure that you are well protected, your broker has an obligation to recommend that you have a complete inspection done by a qualified professional or building inspector that meets certain requirements. The OACIQ provides real estate brokers with Promise to Purchase forms that include a clause that reinforces the messages about the risks associated with forgoing a pre-purchase inspection. |
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Legal warranty: a necessary protectionA person selling a property must warrant that the property is free from any defect in title or hidden defects, except those declared before the sale. This is what is generally known as the “legal warranty,” which has two components: warranty of ownership and warranty of quality. These warranties exist by operation of law, which means they do not have to be specified in the contract. Except for rare exceptions, it is never advisable to exclude the legal warranty from a brokerage contract or promise to purchase. The real estate broker has a duty to inform and advise the seller and the buyer of the consequences of waiving the legal warranty. |
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Certificate of location: an essential documentAs indicated in the real estate brokerage forms, the seller must provide his broker with a certificate of location describing the current condition of the property. This includes not only the physical state of the premises (addition of a pool, shed or fence), but also any changes in by-laws or regulations that may have an impact on the information contained in the certificate of location. The real estate broker must inform his selling client, right at the signing of the brokerage contract, of the need to retain the services of a land surveyor to obtain a new certificate of location if the current one dates back more than 10 years. For his part, the broker representing a buyer must inform his client of the consequences of waiving this requirement. |
DOING BUSINESS WITH A REAL ESTATE BROKER GIVES YOU ACCESS TO THE PROTECTIONS PROVIDED UNDER THE REAL ESTATE BROKERAGE ACT
Do you know the difference between being represented by a real estate broker and receiving fair treatment from one?
What does “being represented” mean?
When you enter into a brokerage contract to purchase with a real estate broker, the broker undertakes to prioritize your interests as a buyer. He will advise you according to your needs and criteria, negotiate the terms of a promise to purchase and present it to the seller or his broker on your behalf. To learn more, watch this video and this one also.
What does “providing fair treatment” mean?
If you are not represented by a real estate broker, but the other party is, for instance the seller of a property in which you are interested, this broker has a duty to defend and protect the interests of his selling client.
Because a broker may not simultaneously represent both parties (buyer and seller) in the same transaction, the seller’s broker has an obligation to recommend that you retain the services of your own real estate broker. Should you choose not to do so, he has an obligation to treat you fairly. To ensure that this is clearly understood, the seller’s broker will provide you with a written notice detailing his role and obligations in relation to fair treatment.
To provide fair treatment, the seller’s broker must:
- show you the property;
- provide you with objective information on all the facts relevant to the transaction, while ensuring that no confidential or strategic information is disclosed;
- provide you with a Promise to purchase form and help you complete it;
- recommend that you have the property inspected;
- disclose all relevant factors pertaining to the transaction;
- verify your identity.
Refer to this guide to better understand the role of a real estate broker in different situations.
