Tag: OREA
The Holdover Period, Real Estate Commissions and Listing Agreements
Sellers should be weary and concerned with agreeing to a holdover period as defined in a typical listing agreement to offer to sell a property. The same can be said about Realtors (real estate sales representatives, brokers and brokerages) who take over a listing immediately upon its expiry or termination, that was previously listed with a different Realtor. For illustrative purposes a typical commission and holdover clause found in the Ontario Real Estate Association (“OREA”) listing agreement available for the Toronto Real Estate Board (“TREB”) members is as follows:”COMMISSION: In consideration of the Listing Brokerage listing the Property, the Seller agrees to pay the Listing Brokerage a commission of……% of the sale price of the Property or…for any valid offer to purchase the Property from any source whatsoever obtained during the Listing Period and on the terms and conditions set out in this Agreement OR such other terms and conditions as the Seller may accept. The Seller further agrees to pay such commission as calculated above if an agreement to purchase is agreed to or accepted by the Seller or anyone on the
Read moreRealtors; learn how to save a deal when spouses are feuding and being uncooperative over the sale of a property!
This article applies to legally married couples and not those in common-law arrangements. The long and the short of it is that IF both spouses are on title of the property [that means they are both registered owners in one capacity or another (commonly as Joint Tenants or even Tenants In Common)], then you will need them BOTH to sign the listing agreement, representation agreement, the offers in between, any other required Realtor documents/amendments, and the finally accepted Agreement of Purchase and Sale and its amendments. So long as that is the case, the two FINAL documents you should ask their lawyer to produce while signing the listing agreement is, first an Un-revocable Direction to the lawyer (presuming he/she will be the one closing the deal) as to how the Proceeds of Sale are to be divided and that he/she is to be the closing lawyer. This ensures that the two spouses cooperate and do not hold each-other hostage on the eve of closing threatening not to close unless one spouse gets what they want out of the deal. It also ensures that the lawyer who holds this direction will be able to use it because he/she will be closing the deal. Second, and at the same time ask the lawyer to also draft and provide a declaration that both spouses will be providing vacant possession on the day of closing before 4:00 pm. This will help the scenario where one spouse is being
Read moreReal Estate Law: Easements Affecting Your Property
Simply defined in the Blacks law dictionary, an easement is an interest in land owned by another person, consisting in the right to use or control the land or an area above or below it, for a specific limited purpose. Often, easements are registered on title thereby granting or assigning rights to use the subject lands for a specific limited purpose. A common easement registered on title grants access to utility companies and municipalities onto a subject property in order to service and maintain a specific utility or the lands, whether its cables for phones and internet or pipes for gas and water. An easement could potentially hinder the enjoyment and use of a property and therefore can become a contentious issue during the course of a real estate transaction.The standard OREA agreement of purchase and sale (“Agreement”) contains a clause called “Title” and it states:
Read moreReal Estate Law: Provisions in the Agreement of Purchase and Sale: Time for Searches, Future Use, Title, Schedules
Time for searchesBefore closing a real estate transaction, a real estate lawyer will need time to search title, executions and make off-title searches or inquiries. The title search date in the OREA Agreement sets out the date in which a lawyer has time to do the searches and request that the Vendor’s lawyer rectify any on title or off-title deficiencies. Should the contract fail to provide a specific time period for submitting requisitions, there a statutory date set in Section 4 of the Vendors and Purchasers Act which prescribes a 30-day period from the date of the contract. It is important to give lawyers on both sides enough time to make and reply to requisitions because if there is a matter that cannot be resolved such as a lien that cannot be satisfied, the contract can be terminated or delayed. Sometimes, lawyers will disagree as to whether the requisition is a valid one and whether failure to satisfy the requisition can terminate or delay a deal. In these cases, there is recourse under the Vendors and Purchasers Act.
Read moreMore Provisions in the Real Estate Agreement of Purchase and Sale
Spousal consentWhen selling a matrimonial home like a principal residence or cottage, it is always necessary to have the non-title holding spouse consent to the sale. For the purposes of real property, the term “spouse”, is defined as a married spouse and matrimonial home is as defined in the Ontario Family Law Act (R.S.O. 1990), therefore the term spouse does not contemplate common-law spouses in this situation. The provisions in the Agreement serves as a warranty, the Seller is warranting that the property is being sold in accordance to the Family Law Act by ensuring that both spouses are consenting to the disposition of a matrimonial home.Urea Formaldehyde Foam Insulation Warranty (“UFFI”)
Read moreReal Estate Law: Closing a Real Estate Transaction
Choosing a closing date The closing date can be whenever the parties agree upon, however selecting a closing date on a weekend or statutory holiday will prevent your transaction from being registered because the land registry offices and the electronic registration system are unavailable. If parties so choose to close on those days, alternative arrangements such as closing in escrow can be made with caution. Other days such as the last day of the month or Fridays are typically very busy for real estate transactions for various reasons such as having the weekend to move in and concluding payment cycles. Therefore, if possible, avoiding those days may be prudent especially if someone is planning on selling and buying on the same day.
Read moreAgreements of Purchase and Sale: Fixtures, Chattels and Rental Items
Fixtures and chattelsThe specification of chattels versus fixtures happens to be one of the more contentious issues arising in a real estate transaction. To recap past articles, generally chattels are generally easily movable property such as household appliances and furniture and fixtures are generally immovable property such as a well in the backyard or a kitchen island. While the standard form Ontario Real Estate Association (OREA Agreement) has made the chattels and fixtures issue simpler to specify, buyers and sellers should always take care in specifying exactly what stays and what goes. The OREA Agreement states “Fixtures Excluded” and “Chattels Included”. Should it be a fixture, it has to stay unless it is specifically excluded; conversely a chattel would not be included unless specified in the Agreement. The rule to follow is “when in doubt spell it out.” Extensive details in the chattel section (i.e., model, colour, serial no.) are recommended strongly because believe
Read moreUnderstanding the Deposit in a Real Estate Transaction
The depositA deposit on a real estate transaction is regarded as consideration by the buyer to the seller to sell their property at a future date. If a deposit is not given upon acceptance or with delivery of an accepted offer, the agreement will not be binding. Therefore it is imperative that a buyer delivers the deposit in order to secure the transaction. The amount of deposit is generally negotiated between the buyer and seller. The seller will try to get the largest deposit possible to deter the buyer from default and conversely the buyer will want to provide a smaller one in case they default. The rule of thumb on a typical transaction is five percent (5%) up front however often buyers can negotiate deposits to be paid in installments or upon waiving certain conditions.The Ontario Real Estate Association standard form agreement of purchase and sale (OREA Agreement) gives two options regarding the timing of deposits. While the first is to have the deposit presented with the offer, the second is to have the deposit paid upon acceptance.
Read moreCompetition Bureau and the Canadian Real Estate Associations (“CREA”): More Private Deals on the Horizon?
Recently the Canadian Competition Bureau requested that CREA open up the Canadian real estate market by making the Multiple Listing Service (“MLS”) open to the public and thus allowing for greater public access to market properties.CREA sets the real estate industry’s standards and practices, including setting commissions of five percent (5%) of a home’s total sale price,
Read moreUnderstanding the Standard Agreement of Purchase and Sale – Part 1
Often my clients have their realtors prepare their agreements of purchase and sale without fully understanding the clauses that are inserted. Most real estate clauses contained in the schedules of the standard Ontario Real Estate Association (OREA) Form have become very standard however, purchasers and vendors should be aware of what is contained in their agreements. Below are some of the items to look out for on a
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