Special requirements on the part of the seller and obligation to present any promise to purchase as soon as possible
(Update of the article published on July 31, 2008)
Particular requirements and auction
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 until a predetermined time and date.
Detailed description sheet
In such a situation, the seller’s broker 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 - Sale: ''The price offered must be higher than the amount indicated in clause 4.1 of the Brokerage contract - Sale. 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: ''This contract does not constitute a promise or offer to sell which would bind the seller to the buyer, but an invitation to submit promises to purchase.''
If no promise to purchase has been accepted once the deadline to bid or submit tenders has passed, the seller’s broker must remove the information from the detailed description sheet.
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; they do not bind a prospective buyer in any way. Therefore, regardless of the seller’s requirements outlined in the Brokerage contract - Sale or on the detailed description sheet regarding the timing for presenting promises to purchase or the asking price, a real estate broker 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 broker 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 the requirements set by the seller.
For any questions, please contact the OACIQ Info Center by email at email@example.com or by phone at 450 462-9800 ou 1 800 440-7170.
For more information, please read the following articles:
(1) Section 102 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising