Forms and contracts
Before you buy or sell a property, why not take a little time to review the OACIQ’s mandatory and recommended forms used by your broker? They will give you a good idea of the main steps involved in a real estate transaction.
Please note that these forms are provided for illustration purposes only and cannot be used for an actual transaction.
Residential immovable – subject or not to GST and QST - Declaration to be made in the mandatory new forms of brokerage contract and promise to purchase
The brokerage contract and promise to purchase mandatory forms for residential brokerage, which must be used as of July 1, 2012, include now the obligation to specify whether or not an immovable is subject to goods and services tax (GST) and Québec sales tax (QST).
Since July 1, 2012, it’s the rules set forth in the new Regulation respecting contracts and forms which govern any brokerage contract or transaction proposal. These rules apply to residential and commercial real estate brokerage as well as mortgage brokerage.
Residential immovable: mandatory forms and statements in any brokerage contract or transaction proposal concerning the sale, purchase, exchange or lease
To ensure a better protection of public, the OACIQ published mandatory forms regarding chiefly residential immovables containing less than 5 dwellings. These forms were designed taking into account the rules provided in the new Regulation respecting contracts and forms. We will deal with them in the first part of this article. Then, we will discuss the mandatory statements that brokers must include in their contracts or transaction proposals regarding a chiefly residential immovable containing less than 5 dwellings, in particular cases where the forms will not necessarily be used by brokers.
On September 28, 2012, the OACIQ Board of Directors adopted the following forms which must be used as of December 1, 2012. Each of these forms below will be accompanied by an explanatory leaflet.
The OACIQ has recently announced that as of December 1, 2012, the following forms must be used to conclude the lease of a dwelling: New forms for residential lease
Property off the market, termination of contract and property temporarily unavailable: concepts not to be confused
Property off the market and termination
Sometimes during the term of an irrevocable exclusive brokerage contract, the seller may no longer wish to sell his immovable. In such a case, and after agreement, the seller’s broker can accept to terminate the contract (cancelation) or take the property off the market. Generally, taking a property off the market will take place in the context of an irrevocable contract; whereas in the context of a revocable contract, unless otherwise agreed to, the seller who wishes to terminate the contract may do so by sending a written notice to that effect to the agency to terminate the brokerage contract.
On October 24, 2012, the OACIQ announced the availability of the following forms which will be recommended for transactions concerning a vacant lot, a commercial or industrial immovable or a chiefly residential immovable containing five dwellings or more.
The Real Estate Brokerage Act and brokerage transactions relating to the sale of an enterprise
Under the Real Estate Brokerage Act, which came into force on May 1, 2010, a brokerage transaction relating to the sale of an enterprise remains subject to this Act only if the transaction is made under a single contract and the enterprise’s property, according to its market value, consists mainly of immovable property.
Since July 1, 2012, the new mandatory form Declarations by the seller of the immovable must be used for all transactions involving the sale, by a natural person, of a chiefly residential immovable containing less than 5 dwellings, including immovables held in divided or undivided co-ownership. The broker must complete this form with the seller and have him sign it at the same time as the brokerage contract is entered into. This is done for the purpose of transparency as well as to protect the interests of the parties to the transaction and those of the broker. The seller must provide the information to the best of his knowledge; the form does not require the seller to declare something that he does not know.
As of July 1, 2012, the ACAIQ mandatory form Non-exclusive brokerage contract – Sale will no longer be used. However, as of that date, it will be possible to use either of the mandatory forms of Exclusive brokerage contract – Sale (according to the type of immovable concerned) and make it non-exclusive according to the instructions below (deletions are statements which should be removed or replaced and additions are in blue).