Is it possible to cancel a real estate promise to purchase?
(Article of the OACIQ published on Protégez-Vous.ca website, in March 2018)
This is a common question asked by consumers who contact the information centre Info OACIQ.
The information centre Info OACIQ of the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ) handles more than 58,000 inquiries from the public and brokers regarding real estate and mortgage brokerage each year. Here is the answer to one of the main questions asked by the public: “Can I cancel my promise to purchase?”
A Promise to purchase, a firm commitment
A Promise to purchase is a form created by the OACIQ in which a buyer who enlisted the services of a real estate broker informs the seller of his firm intention to purchase his property under certain conditions. Once it is signed by the prospective buyer, even before being presented, it pertains to its recipient–who is the seller. The latter is free to accept it, refuse it, make a counter-proposal or ignore it.
In the Promise to purchase, the buyer records in writing the conditions he undertakes to meet for a given period, by specifying a time and an expiry date beyond which the Promise to purchase becomes null and void if it is not accepted. As long as it is valid and in the hands of the seller, the buyer may only enhance his offer to the benefit of the other party.
Cancellation of a Promise to purchase
Once accepted by the seller, a Promise to purchase can no longer be cancelled by either party unless:
- a clause to that effect has been provided (e.g. after an inspection);
- it is the will of both parties;
- there is a judicial decision.
In addition, as long as the seller has not yet received the Promise to purchase, the Civil Code of Québec allows the buyer to withdraw his offer by means of a written notice.
What about a new property?
When buying a new property, the preliminary contract, which necessarily replaces the Promise to purchase form, gives the buyer a 10-day period to withdraw after signing. The seller may however claim up to 0.5% of the agreed selling price.
Got more questions?
The information centre Info OACIQ is the first place to contact with any question related to real estate or mortgage brokerage. Its information agents put their knowledge at the service of the protection of the public. Do not hesitate to contact them!
For more information
- For a clear understanding of the promise to purchase
- Can a promise to purchase be withdrawn?
- Instructions for buying from a builder or developer