Brian Madigan LL.B., Broker
BRMadigan@iSourceRealEstate.com

RE/MAX West Realty Inc.,
Brokerage
Independently owned and operated

96 Rexdale Blvd. 
Toronto, Ontario 


Phone: 416-745-2300
Toll Free: 1-888-507-0817

 

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Buyer Representation Agreement Explained (Ontario) Part 5 DEFINITIONS

April 7, 2015

Buyer Representation Agreement Explained (Ontario) Part 5 DEFINITIONS

There is a section dealing with Definitions and it reads like this:

 

 

1. DEFINITIONS AND INTERPRETATIONS: For the purposes of this Buyer Representation Agreement (“Authority” or “Agreement”), "Buyer" includes purchaser and tenant, a "seller" includes a vendor, a landlord or a prospective seller, vendor or landlord and a “real estate board” includes a real estate association. A purchase shall be deemed to include the entering into of any agreement to exchange, or the obtaining of an option to purchase which is subsequently exercised, and a lease includes any rental agreement, sub-lease or renewal of a lease. This Agreement shall be read with all changes of gender or number required by the context. For purposes of this Agreement, Buyer shall be deemed to include any spouse, heirs, executors, administrators, successors, assigns, related corporations and affiliated corporations. Related corporations or affiliated corporations shall include any corporation where one half or a majority of the shareholders, directors or officers of the related or affiliated corporation are the same person(s) as the shareholders, directors, or officers of the corporation introduced to or shown the property.

 

Now, you probably appreciate that it is rather difficult to read through that statement and properly understand it, with all its implications. So, let’s pull it apart somewhat. My comments are shown in “italics” below the actual specific wording.

 

1.DEFINITIONS AND INTERPRETATIONS:

For the purposes of this Buyer Representation Agreement (“Authority” or “Agreement”),

 

First using the term “authority is somewhat odd here, but nevertheless, this entire agreement is about giving the agent authority to act.

 

"Buyer" includes purchaser and tenant,

 

This is somewhat unusual too. However, it is intended to reinforce the idea that a tenant is acquiring something, appointing someone and paying a commission.

 

a "seller" includes a vendor, a landlord or a prospective seller, vendor or landlord and

 

This is the corollary of the tenant issue. Here, the landlord can be a seller so acquiring something from a landlord is still covered under this agreement.

 

a “real estate board” includes a real estate association.

 

Later in the agreement the concept of a board will be used, and some boards refer to themselves as “associations.”

 

A purchase shall be deemed to include the entering into of any agreement to exchange, or the obtaining of an option to purchase which is subsequently exercised, and

 

This is a reasonable extension of the term purchase. An option should indeed be included, as well as any deal where land is swapped for land. That could easily occur when we are dealing with two commercial land developers.

 

a lease includes any rental agreement, sub-lease or renewal of a lease.

 

Again, this would be a reasonable extension of the term “lease”. But, here, you are probably just thinking of something new. Staying put, is covered too. So, you might be looking around for better and new premises, but you might be surprised to find that just staying where you are could cost you some money too. Is that what you intended?

 

This Agreement shall be read with all changes of gender or number required by the context.

 

This provision is relatively common with contracts. It just patches up errors in grammar relating to number and gender. You may just say “don’t make them in the first place”, but this term renders them “good to go”.

 

For purposes of this Agreement, Buyer shall be deemed to include

any spouse,

heirs, executors, administrators, successors, assigns,

related corporations and affiliated corporations.

 

The interesting part here are the references to spouse and related corporations. You may not have thought that you were signing this agreement on behalf of your spouse, but in a round about way, you are. The spouse is NOT part of the agreement. You cannot bind your spouse without specific authority. But, if your spouse does a deal, you have to pay under this agreement.

 

Related corporations or affiliated corporations shall include any corporation where one half or a majority of the shareholders, directors or officers of the related or affiliated corporation are the same person(s) as the shareholders, directors, or officers of the corporation introduced to or shown the property.

 

The agent shows you the property. Just like a spouse, you might have to pay a commission. That corporation doesn’t, just you. The test of being related would be 2 out of three, or two out of four. Usually, that just deals with ownership. Here, this isn’t the case, it includes directors and officers as well.

 

This is a much different approach than “related parties” and “associated parties” under the Real Estate and Business Brokers Act, 2002.

 

So, you need to be aware of some of the expanded definitions as we go forward with the contract review.

 

Brian Madigan LL.B. Broker

www.iSourceRealEstate.com


Tagged with: buyer representation agreement bra onatrio orea form explanation definitions interprestations agency
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Brian Madigan LL.B. Broker

RE/MAX West Realty Inc. Brokerage

Independently owned and operated

96 Rexdale Blvd. , Toronto Ontario,

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