Which copy goes to whom when signing the paper version of a contract, a transaction proposal or a form?

The OACIQ has sometimes observed a lack of consistency among licence holders in the way the paper versions of completed and signed contracts, transaction proposals or forms are remitted to the parties concerned. In residential real estate, omitting to give a duplicate of the brokerage contract to sell or to purchase to the client can lead to serious repercussions, as we will discuss below.

In addition, the presentation, reply and acknowledgment of receipt stages of a promise to purchase require that a copy be given to the signing party. But which copy goes to whom?

The brokerage contract

For residential properties, the brokerage contract to sell or purchase must be in written form so that the broker or agency can claim remuneration. When a brokerage contract concerns a chiefly residential immovable containing less than five dwellings, including divided and undivided co-ownership properties, sections 24 and 26 of the Real Estate Brokerage Act requires that the contract signed between the real estate agency or broker and the client be in writing. Where the brokerage contract is entered into with a natural person, the broker must use the form developed by the OACIQ.

Giving a duplicate to the client

The starting point for the client to fulfill his obligations
The brokerage contract is in duplicate. Even if the upper part of the contract gets copied onto the second page, both pages are still considered originals since they both bear original signatures. It should be noted that, under section 25 of the Real Estate Brokerage Act, the real estate agency or broker has an obligation to remit the duplicate of the contract to the client.

Each of the two parties keeps a contract bearing his own original signature and that of their co-contracting party. But what happens if, after the signing of the contract, the agency or the broker does not give the duplicate to the client immediately? The client could refuse to pay the remuneration due to his broker’s agency or to his broker acting on his own account, arguing that he never received a duplicate of his contract. That is because the client is bound to carry out his obligations only as of the time of receipt of a duplicate of his contract.

The right to cancel the contract
Failure to provide the client with a duplicate of his brokerage contract also has a major impact on the right to cancel the contract. Section 28 of the Real Estate Brokerage Act stipulates that the client can only avail himself of this right from the time of receipt of the contract.(See the article entitled The client’s right of withdrawal in the brokerage contract: A choice to be respected.)

The promise to purchase

Each copy of the Promise to purchase form is considered to be an original, since it bears an original signature. To determine who gets what copy, simply review the various stages of the promise to purchase form.

Who gets what copy

1. First, the buyer signs all copies of his promise to purchase and keeps the first copy.
2. Next, the seller accepts, refuses or makes a Counter-proposal to the promise to purchase. In turn, he must sign each remaining copy and keep the second copy.
3. Then we return to the buyer and have him sign the acknowledgement of receipt of the seller’s reply. The buyer signs his promise to purchase again and keeps the third copy. However, as indicated in the article entitled “Promise to purchase: signing the acknowledgement of receipt”, should the seller respond to a Promise to purchase by a Counter-proposal, signing the acknowledgement of receipt on the Promise to purchase itself is not required.
4. Who gets the remaining copy?  It goes to the agency or broker acting on his own account who acted as intermediary in the transaction, in accordance with sections 13 and 17 of the Regulation respecting records, books and registers, trust accounting and inspection of brokers and agencies. In the event each of the parties was represented by an agency or broker acting on his own account, an additional copy or photocopy of the transaction proposal including all the signatures shall be obtained and submitted to the other agency or broker acting on his own account. The latter must also keep a photocopy for his records.

We also recommend that the seller be given a photocopy of this last copy, so that he will have written proof that the buyer has acknowledged receipt of his reply.