Proof of receipt and follow-up on conditions

An accepted transaction proposal usually contains conditions that must be fulfilled before the transaction can be concluded, such as financing, building inspection, and review of documents. Real estate brokers are responsible for following up on these conditions. Their duties and obligations extend well beyond the negotiation step–they must protect the interests of the party they represent while treating fairly the party who is not represented by another broker.

It is therefore the brokers’ responsibility to ensure that the parties to the transaction are well aware of any deadline to be met and any notice or document that needs to be provided. They must also inform the parties of their rights and obligations regarding the documents (forms and others) that they require them to sign.

Real estate brokers must be familiar with the content of the brokerage forms and clearly explain it to their clients.  They must ensure that the clauses are clear, reflect the wishes of the parties, and are adapted to the client's criteria and needs. Read the article Drawing up a clause: Tips and examples of standard clauses for more details.

Deadlines for conditions included in the mandatory promise to purchase forms

In general, the deadlines included in the mandatory promise to purchase forms for financing, inspection or document verification clauses are calculated in consecutive calendar days, i.e. periods of twenty-four hours, from midnight to midnight. Saturdays and Sundays as well as statutory holidays are counted as calendar days. The day marking the starting point, i.e. the date the promise to purchase is accepted, is not counted, but the day of the deadline is. This calculation rule also applies to all deadlines set out in the OACIQ brokerage forms.

IMPORTANT: It should be noted that an exact time following the expiry of the deadline is mentioned in the inspection clause (before 8.00 pm).

Obtaining acknowledgements of receipt of documents and notices

The obligations outlined in a promise to purchase concern only the parties involved in the transaction–the buyer and the seller, or the lessee and the lessor. However, as an intermediary, the broker's role includes ensuring that the parties obtain proof of receipt of any document or notice sent through the broker.            

For example, under the document review and verification clause of the OACIQ promise to purchase form, the buyer can make the Promise to purchase (PP) null and void if he is not satisfied with the examination and verification of the documents, or if he does not receive them within the specified time period. How can the seller prove that he did send the document in a timely fashion? 

The only way the seller can prove that the documents were provided on time is by obtaining a proof of receipt of the documents by the buyer. This is why hence the seller's broker's role is crucial at this stage. The broker must make sure to get proof in writing that the buyer received the documents within the time frame and according to the mechanism stipulated in the PP. One way to do this is to send the buyer two copies of the documents and have him acknowledge receipt by signing one of them, making sure to include the date of receipt and signature. These documents must then be kept in the transaction record.

If the buyer is not satisfied with his examination of the document, he must notify the seller within the time frame and according to the terms stipulated in clause 9.1. The buyer's broker should obtain proof of receipt of the notice by the seller. This helps establish that the notice was received within the deadline and unequivocally confirms the cancellation of the PP.

Usefulness of the Notice and follow-up on fulfilment of conditions (NF) form

The recommended Notice and follow-up on fulfilment of conditions (NF) form can be used in most situations where the client needs to inform the other party whether or not a condition has been fulfilled.  It is not used to amend a promise to purchase.

IMPORTANT: The broker is responsible for ensuring that the other party receives this notice. Any means that proves receipt of a document or notice can be used. It is important for every broker to ensure that the fulfilment of the conditions of a promise to purchase is rigorously followed up on and that proof is kept on file. When deadlines are about to expire, the broker may, in exceptional cases, advise his client to send the notice via bailiff to obtain a report, given the urgency to act.  However, this method should be used sparingly due to the higher costs it may entail.