Schedule “B” Missteps #2
Let’s have a look at this clause:
“In the event that any condition in this offer is not fulfilled or waived by the Buyers, the Buyers agree to provide the Sellers with a true copy of any and all Inspection Reports, Status Certificates, test results etc. prior to the signing of a mutual release and the return of the buyer’s deposit.”
So, if you were the Listing Agent, would you want that in the deal?
I appreciate that it’s your standard Brokerage’s Schedule “B”, but you are still supposed to read it to determine if it makes any sense in your transaction.
True Condition Precedent
Whoever drafted this clause in the first place was likely unaware of a True Condition Precedent. That is one which is dependent upon a third party decision. As soon as the third party has “decided”, the deal is a “go ahead”, no need for a Fulfillment or Waiver.
Copies of Reports, Certificates, Results
Your client, the Seller had no notice whatsoever of some of these potential problems. Now, they know them, and now they have disclosure obligations resulting from their knowledge. What a great way to bring down the value of the property! Nothing could be better!
Suing the Listing Agent
This is the remedy for every Seller whose value dropped as a consequence of their “new found” knowledge at the hands of their own agent. This was not a wise move.
Some of this information may be confidential and proprietary, so it would be best to strike out the clause in the first place.
OREA Standard Form
Please consider the fact that if this was such a great clause, that it should be in every Offer, no matter what, then OREA might have included it in the standard Form.
Whether you act for the Seller or the Buyer, you will have to justify the inclusion of any additional clauses that you choose to add, and if they are just “made up” stuff, then you had better have a very good explanation. And, if the spelling and grammar are incorrect, that will be even more difficult.
Brian Madigan LL.B., Broker