How to proceed when a legal person is not yet incorporated, or in the absence of the full name?

Normally, the broker must indicate in the Promise to purchase (PP) the name of the real buyer and the name of the mandatary representing him, if any. In the latter case, he must get the written power of attorney authorizing the mandatary to act, and check the powers granted to him.

However, there may be situations where a legal person that is not yet incorporated wants to buy or, even more rarely, cases where a buyer wants to keep his identity confidential–for instance because of his reputation. Under such circumstances, the broker must identify and check the identity of the mandatary who represents the legal person to be legally incorporated or the natural person to be named. In the “Identification of the parties” section of the PP, the broker must indicate “Legal person to be incorporated” or “Natural person to be named”, represented by the mandatary’s name. The mandatary shall sign the PP.

If desired, the seller may present a Counter-proposal to a promise to purchase (CP) so that the buyer’s name can be disclosed to him within a specified time frame. If the name is not disclosed, the PP becomes null and void, in accordance with the process indicated in the same CP. In the case of a legal person to be incorporated, the broker shall ensure a follow-up and modify the forms to provide the real name of the corporation, once it has been incorporated.

Mandatary, an important responsibility

It is important to mention that, if the buyer “to be named” refuses to buy, is insolvent or does not exist, the person acting as mandatary is personally liable, i.e., he might have to buy the immovable in his place (sect. 2159 of the Civil Code of Québec).

Also read: The real estate broker acting as the client’s intermediary or mandatary