Special requirements on the part of the seller and obligation to present any promise to purchase as soon as possible
Notice to reader
Please note that the following article has not yet been updated since the coming into force of the new Real Estate Brokerage Act on May 1, 2010. The OACIQ positions which are conveyed in this article may have evolved since the date of its publication. It is your responsibility to ensure, at all times, that you are acting or that you are exercising your rights or recourse in accordance with the Real Estate Brokerage Act, its regulations or any other applicable law.
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Sometimes a seller may have particular requirements regarding the timing for submitting promises to purchase to him regarding an immovable for sale. For example, a seller may want to consider all promises to purchase at the same time, on a predetermined date. In such a case, the detailed description sheet should include a statement such as: ''No promise to purchase will be presented before X'', ''No promise to purchase will be accepted before X'' or ''All promises to purchase must be made irrevocable until X''. An auction process could also be considered from this angle. Thus a sale by bids or call for tenders is an invitation to buyers to submit promises to purchase at a given time and date, at which point all the promises to purchase will be processed at once. In this situation, you must include on the detailed description sheet:
- the lowest price that the seller is prepared to accept, indicated as follows under clause 11.1 of the brokerage contract: ''The price offered must be higher than the amount indicated in clause 4.1 of the brokerage contract. The seller informs bidders that he will not consider any offer below this amount.'';
- viewing dates, the date and time when the promises to purchase will be presented, as well as the seller’s reply deadline and conditions (e.g. deposit, inspection prior to submitting a promise to purchase, etc.);
- the following clause: ''It is understood that this contract does not constitute a promise or offer to sell which, upon acceptance, would bind the seller towards the buyer, but rather an invitation to the public to submit promises to purchase.''
If no promise to purchase has been accepted once the deadline to bid or submit tenders has passed, the information must be removed from the detailed description sheet right away.
Obligation to present a promise to purchase as soon as possible
It is important to note that the above statements are only an expression of the seller’s wishes and do not bind a prospective buyer in any way. Therefore, regardless of the seller’s requirements outlined in the brokerage contract or on the detailed description sheet regarding the timing for presenting promises to purchase or the asking price, a real estate agent who receives a promise to purchase always has an obligation to present it as soon as possible (1).
No obligation to reply
The seller, however, is under no obligation to reply to a promise to purchase that does not meet the requirements outlined in the detailed description sheet. The seller retains the right not to consider a promise to purchase or to refuse it, and to consider only those promises to purchase that meet his timing requirements.
Acceptance of a promise to purchase before the deadline
What if the seller receives a promise to purchase that is acceptable to him but does not meet the timing requirements he had himself set? If the seller intends to accept an offer without waiting for other potential promises that might be made before his deadline, the real estate agent representing him should advise him to ask a legal advisor whether he can do so without liability towards the other prospective buyers who did meet his requirements. For more information, read the following articles:
------------- (1) Section 39 of the Real Estate Brokerage Act and sections 78, 85 and 86 of the By-Law of the ACAIQ