Clause 10.5 of the promise to purchase to report a defect or irregularity

Should the buyer or the seller be notified, following the fulfilment of conditions, but before the signing of the deed of sale, of any defect or irregularity whatsoever affecting the titles of the immovable or the declarations and obligations of the seller, the buyer has a recourse provided under clause 10.5 of the Promise to purchase form (for the Promise to purchase – Divided co-ownership (PPD) form, it’s under clause (10.7). If the buyer learns that the immovable has a defect or irregularity (e.g. an inground pool encroaching on a Hydro-Québec servitude), he is not bound to purchase the immovable with this irregularity. In all cases, the party concerned should consult their broker for guidance on the steps to be taken.

The seller will have a period of twenty-one (21) days following receipt of a written notice disclosing the problem to notify the buyer in writing:

• That he has remedied that defect or irregularity at his expense;

OR

• That he will not remedy it.

If the seller informs the buyer that he is unable to remedy the problem, the buyer has five days following receipt of a notice from the seller to this effect or following the expiry of the twenty-one (21) day period in the absence of any notice to exercise one of the two following options:

• Buy with the alleged defects or irregularities mentioned. Consequently, the seller’s declarations and obligations shall be reduced accordingly;

OR

• Render  his promise to purchase null and void. If the buyer chooses the latter option, he may ask that all costs reasonably incurred by the buyer and the seller in this transaction be borne only by the seller (notary, inspection, mortgage application fees, etc.).

WARNING: The buyer must make sure he replies within the five-day period, otherwise the promise to purchase shall become null and void and each party shall be responsible for its own costs.

The broker must fully understand this clause and how it works and advise his client to use it when necessary.

If the situation is complex, the real estate broker must advise his client to consult a legal expert to protect his interests. From that point on, communications may take place directly between the contracting parties (buyer and seller), without the involvement of real estate brokers.