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: Spousal Coverage

October 29, 2017 - Updated: October 29, 2017

Buyer Representation Agreement:  Spousal Coverage
 

Bob the real estate agent takes out his friend Bill to see properties, and has Bill sign a Buyer Representation Agreement.
 

The question here, is whether this affects Mary, Bill’s wife.
 

Here is some wording from the document itself:
 

“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.”
 

That provision is a little different and appears to contain a rather unfortunate error. Let’s look at that same clause again:
 

“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.”
 

There were two parts to that clause, one dealt with a “spouse” and the other dealt with “corporations”. When it came to definitions, there was a reference to “introduced to or shown the property”. That’s an extra qualifier.
 

When it comes to the “spouse”, there are no qualifiers and the entire reference to “introduced to or shown the property” only applies to corporations. Rather than a comma or semi colon, a period was used. That’s not good.
 

The next issue is the definition of “spouse”. What does that mean? Where do we find the definition?
 

There are two definitions in the Family Law Act, namely the “property spouse” and the “support spouse” (my descriptions of the two references). I am going to suggest that it is only the “property spouse” definition which applies here and that reads as follows:
 

          “spouse” means either of two persons who,

          (a) are married to each other, or

(b) have together entered into a marriage that is voidable or void, in good faith on the part of a person relying on this clause to assert any right.”

 

So, bottom line here is that there was actually a marriage ceremony.

 

Is the husband able to sign for his wife and vice versa? Is there any kind of implied agency?

 

Here is the relevant provision from the Family Law Act:

 

“Necessities of life

 

Pledging credit of spouse

 

45 (1) During cohabitation, a spouse has authority to render himself or herself and his or her spouse jointly and severally liable to a third party for necessities of life, unless the spouse has notified the third party that he or she has withdrawn the authority. 

…………..

Common law supplanted

(4) This section applies in place of the rules of common law by which a wife may pledge her husband’s credit.”

 

You will notice this simply relates to purchasing the necessities of life, nothing else and certainly not “real estate”. Absent a Power of Attorney appointment, there is nothing.

 

For the purposes of the Buyer Representation Agreement, this is really not binding upon the spouse. This means that no matter what, Mary is not bound to the BRA just because Bill signed it.

 

However, there is a slightly clever maneuver here. There is an expanded definition of the expression “Buyer Bill”. For the purposes of the Buyer Representation Agreement, Bill means “Bill and Mary” even though Mary herself is not liable and not a signatory under the contract.

 

Bill agrees to the fact that when he signs “Bill” he means that to include his wife Mary no matter what. Obviously, this restricts Bill’s rights. Was that explained to Bill by Bob the real estate agent before he signs the agreement? Usually not!

 

There might be some argument if Mary was “introduced to or shown the property”. But, here there is no qualifier.

 

What happens if Bill marries Mary after he signs the Agreement? Naturally, the document is silent on this point.

 

It would be very difficult for the Brokerage to enforce this agreement against Bill, if Mary bought a property through someone else. This document is NEVER enforceable against Mary.

 

In fact, it’s likely VOID for uncertainty:

 

1)    The definition of spouse is not clear,

2)    It lacks any qualification like “introduced to or shown the property”, and

3)    It lacks ascertainment of the identity of Mary.

 

Those matters, plus the fact that it wasn’t explained and so we don’t have “informed consent” contaminate this proposed agreement from the outset.

 

Brian Madigan LL.B., Broker

www.iSourceRealEstate.com


Tagged with: bra buyer representation agreement spouse definition family law act ontario law
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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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