Key Elements of a Residential Purchase Agreement
In Alberta, realtors should be particularly careful to explain the following key elements in a residential purchase contract:
1. Purchase Price:
Clearly outline the agreed-upon purchase price in Canadian dollars for the property.
2. Deposit:
Explain the amount of the deposit required, when it is due, and how it will be held in trust until closing.
3. Conditions:
Describe any conditions that must be met before the contract becomes binding, such as financing, home inspection, or review of condominium documents.
4. Property details:
Provide a detailed description of the property being purchased, including legal description, lot size, and any included fixtures or personal property.
5. Title:
Explain the concept of title and the importance of a clear title in a real estate transaction.
6. Property taxes:
Clarify how property taxes are prorated between the buyer and seller based on the closing date.
7. Possession date:
Specify the possession date when the buyer will take possession of the property and any conditions related to early possession.
8. Seller disclosures:
Ensure that sellers have disclosed all material latent defects in the property as required by Alberta law.
9. Real property report:
Explain the importance of a real property report and compliance certificate in Alberta and who is responsible for obtaining them.
10. Signatures:
Ensure that all parties involved in the transaction have signed the contract, including any amendments or addendums.
By explaining these important elements clearly and in accordance with Alberta real estate laws and regulations, realtors can help protect their clients’ interests and ensure a smooth residential purchase transaction.
Possible Consequences of Failure of Duty and Care
If a realtor fails to explain the terms of a real estate purchase contract to their client, it can have several negative consequences for both the realtor and the client:
1. Misunderstandings:
Without a clear explanation of the terms of the contract, the client may misunderstand their rights and obligations, leading to confusion and potential disputes during the transaction.
2. Legal implications:
Failure to explain important terms of the contract could result in the client unknowingly breaching the contract, leading to legal consequences or financial penalties.
3. Lack of informed decision-making:
Clients rely on their realtor to provide them with all the necessary information to make informed decisions. If key terms are not explained, the client may make decisions that are not in their best interest.
4. Financial risks:
Misunderstanding the terms of the contract could expose the client to financial risks, such as losing earnest money deposits or being held liable for damages in case of contract breach.
5. Damage to reputation:
Failing to properly explain the terms of a contract can damage the realtor’s reputation and credibility, leading to a loss of trust from clients and potential referrals.
6. Legal liability:
Realtors have a duty to act in the best interests of their clients and provide them with accurate and complete information. Failure to do so could result in legal liability if the client suffers financial losses as a result.
In summary, it is crucial for realtors to thoroughly explain all terms of a real estate purchase contract to their clients to ensure transparency, understanding, and compliance with legal requirements. Failure to do so can have serious consequences for both the realtor and the client.
If you have concerns or require assistance, then seek legal guidance from our real estate lawyers at Virtual Law Group Canada at (825) 437 8777, or via email info@virtuallawgroup.ca
