It is a term of every real estate contract that all financial charges be discharged. In the event that the net proceeds of sale (after commission) are not sufficient to pay the mortgage, you will have to bring in money to complete the deal.
REC will be dissolved and regulation assumed by the SUPERINTENDANT OF REAL ESTATE.
FINES will be increased to $250k for Realtors and $500k for brokerages.
If you are on a TEAM, the announcement on Dual Agency will likely cause the most issues… but remember, that old “sub-brokerage” model… some thought should be given again to that structure (now… in combination with designated agency) for larger teams where the new dual agency prohibitions will be an issue.
Given the tone of the news conference, more announcements are forthcoming.
Love to chat more, but it’s the end of June and I got files to close,
As Dorie the realtor would say… Just keep listing… listing… listing
Effective today, the province has introduced new regulations governing Realtors. They didn’t change the law of the contract (where assignments are expressly allowed under the Law and Equity Act), but require that more drafting and disclosure be made by Realtors.
All Realtor drafted contracts (residential and commercial) should contain the following:
this contract must not be assigned without the written consent of the seller; and;
the seller is entitled to any profit resulting from an assignment of the contract by the buyer or any subsequent assignee..
(Note: These are the official statements and I note this “drafting” is quite poor, some contractual definition of PROFIT and ASSIGNEE is required).
In the event these terms are NOT in the contract the Selling Licensee is required to disclose this to the Seller in writing with the following form:
There remains a discussion to be had on how this effects Limited Dual Agency –the presence or absence of the “Assignment Provisions” may in some factual circumstances relate to a discussion of a party’s “motivation”… if that is the case, the Realtor should consider whether LDA is a viable option (note: in my opinion, I think we are also going to see LDA rule changes arising out of the committee work that is currently ongoing).
Shadow flipping or assigning a contract prior to completion has been brought under recent media scrutiny See: CBC or VANCOUVER SUN stories.
This generally refers to ASSIGNING a contract, which is a legal process whereby Purchaser #1 “sells” its contract to Purchaser #2.
This is legal because, once subjects are removed from the deal (and the contract is binding), the Purchaser has an equitable interest in the property from that date. This can occur months in advance of closing. The Purchaser (with binding contract in hand) then will gain if the property appreciates OR will lose if the property depreciates. (In the Kelowna real estate market I have seen both occur)
It is also this equitable interest that allows Purchasers to sue for specific performance of real estate contracts and demand conveyance of the property to them if a Seller refuses to complete.
Altering this principal of British Columbia real estate law would dramatically change many aspects of real estate law in this province and would not be prudent legislative policy. A better practice would be for real estate buyers and sellers to work with all their professional advisors – lawyers, realtors, appraisers and accountants – early in the process to get well rounded independent advice.