Brand New Terms That Were Added To The New Alberta Real Estate Contract
The changes made in September 2016, to the AREA Residential Real Estate Purchase Contract represents a major change. As a buyer or a seller, it is important to understand these changes. Below are the top 10 additions to the new Alberta Real estate Contract that were made in September 2016 that both buyers and sellers should be aware of. You should also be aware of the Top 10 Major Changes In the New Purchase Contract.
1) Vacant Possession
The seller, pursuant to s.2.3 of the new Alberta Real estate contract, must provide vacant possession to the buyer on the Completion Day. This requirement is no longer “subject to the rights of existing tenants, if any”. The onus is on the seller to inform the buyer that there are tenants residing at the property and to amend the purchase contract to reflect that the buyer will be accepting and assuming existing tenancies. The seller now assumes liability, if he is unable to deliver vacant possession due to tenants residing on the property on Completion Day.
2) Purchase Price
The new AREA Residential Purchase Contract no longer breakdowns the Purchase Price to determine how much of the purchase price will be paid via deposit, cash or mortgage by the buyer. Breakdown of payment will be evidenced throughout the contract specifically under heading 4 (deposits) or under heading 9 (financing schedule) of the new AREA Residential Purchase Contract.
3) Due Diligence Warranty
Under s.3.1(g) of the new Alberta Real estate contract, the buyer and seller are responsible for completing their own due diligence. If due diligence is not performed by the party, they assume all risks associated with the lack due diligence. An example on behalf of the buyer, would be to confirm the total square footage of the property by getting an independent inspection done.
4) Failure to Pay Deposit
The seller, pursuant to s.4.5 may void a purchase contract if the buyer fails to pay a deposit as required by the contract provided the seller gives the buyer notice. If the purchase contract is voided by the seller due to the buyer’s failure to pay a deposit, all deposits already paid by the buyer must be refunded.
5) Release of Deposit
After the purchase contract is accepted, deposits will be refunded to the buyer without prior notice to release if; the buyer’s conditions are not waived on or before the condition day as specified in the purchase contract, if the buyer or the seller voids the contract due either to the seller not providing a Dower Consent and Acknowledgement Form to the buyer or the buyer has not paid the deposits as required to pursuant to the purchase contract.
6) Permit Disclosure
As per s.6.1(g), the seller must disclose in the purchase contract any known government and local authority notices regarding the Property and any known lack of permits for any development of the Property. These representations will survive completion and may be enforced after the Completion Day.
7) Dower Condition
A spouse who is not registered on title as an owner, must sign the purchase contract and must, pursuant to heading 7 of the new AREA Residential Purchase Contract, attach a completed Dower Consent and Acknowledgement form by a certain date to the buyer. Otherwise, the buyer may void the purchase contract and be refunded all deposits already paid to the seller.
8) Cost of Conditions
The buyer and seller are responsible for their respective conditions within the new Alberta Real estate contract unless otherwise specified. This provides clarity and reduces the chances of a dispute between the buyer and seller.
9) Licensed Home Inspector
Under s.8.2(b) of the new Alberta Real estate contract, it is now mandated that when a purchase contract is subject to a property inspection, the property inspection must be conducted by a licensed home inspector. The old AREA Residential Purchase Contract did not specify who could perform the property inspection. This provides the buyer with added protection, by allowing them to make an informed decision on whether to buy the property based on its current condition.
10) Rejection Notice
The new AREA Residential Purchase Contract provides a mechanism for the seller or buyer to provide a written rejection to other party regarding their offer. Instead of failing to respond or waiting for a deadline to pass, the rejection can be made right away.
Lawyers Who Help With The New Alberta Real Estate Purchase Contract
Do you have any concerns regarding signing a new Alberta Real estate contract? Call today. Our real estate legal team is able to clear things up so that you understand your Alberta real estate purchase contract…. Before you sign it. You can reach us toll-free at 1-877-225-8817, or 403-225-8810 locally or email us directly here.