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Agreement of Purchase and Sale (Acknowledgement)

By
Commercial Real Estate Agent with RE/MAX West Realty Inc., Brokerage (Toronto)

Agreement of Purchase and Sale (Acknowledgement)

By Brian Madigan LL.B.

(Ontario Real Estate Source)

The Acknowledgement section in a standard form agreement is fairly new. However, it does have its purpose.

Let's have a look at the standard form agreement of purchase and sale and see what it says in that regard to confirmation of acceptance:

"Acknowledgement

I acknowledge receipt of my signed copy of this accepted Agreement of Purchase and Sale and I authorize the Agent to forward a copy to my lawyer."


There is room for each party to sign and date the Acknowledgement. There is room for each party to record an address for service, and a telephone number.

Additionally, there are lines to permit the party to insert the name of their lawyers, followed by the address, telephone and fax numbers.

There is no corresponding statement for the Consenting Spouse. You might wonder how the parties are to contact an oppositionally defiant spouse who has reluctantly agreed to sign the document, when there is no contact information and no lawyer's name. I suppose we will just have to proceed upon the assumption that "all is well".

Let's have a look at each line, thought, or partial sentence by a letter of the alphabet for later review:

Acknowledgement

A) I acknowledge receipt

B) of my signed copy

C) of this accepted Agreement of Purchase and Sale

D) and I authorize the Agent

E) to forward a copy to my lawyer.

So, now let's have a look at each of the sentences or partial sentences and see what we come up with.

A) I acknowledge receipt

This is a statement which is intended to offer some protection to the real estate practitioner.

B) of my signed copy

Two decades ago, six (6) copies of the document were commonplace; one for each of the parties, one for each of the brokerages and one for each of the lawyers. All copies were signed and executed.

Today, fax copies are permitted, so often, there are no true "originals". The final faxed version is the "best copy" available. Rather than fax it again, it may be scanned and forwarded to the client and the lawyer.

C) of this accepted Agreement of Purchase and
Sale

The requirement here is the final version, not earlier copies. Should there only be one, then unless the client has "scanning" or "faxing" facilities in their home, this is best left until the next day.

There is no need to prove to the other side, that you have an Acknowledgement signed by your client. The purpose to protect the practitioner, but as you will see, the contact information is helpful.

D) and I authorize the Agent

This is interesting. It's an authorization. It is not an obligation or requirement. So, in that regard while the agent has permission to send the document to the lawyer, this statement does not set out that it is the duty to forward it, nor does it actually state who is to take on this task.

Now, the concept of "agent" has been replaced with "representation". The term "agent" does not appear in the Real Estate and Business Brokers Act, 2002, nor the regulations passed thereunder.

So, the term "agent" is an odd choice of a word. From a common law perspective, the brokerage would have an agency relationship with either a buyer or a seller, pursuant to a buyer representation agreement or a listing agreement.

The brokerage could have a non-agency relationship in writing evidenced by a customer service agreement or commission agreement. Presumably, this authorization would not apply in such circumstances.

E) to forward a copy to my lawyer.

The lawyer will need a copy of the agreement as soon as possible. It would be wise for the brokerage to send it at once.

The dates of conditions, particularly lawyer's approval and the requisition dates should be sent in the covering letter. However, be very cautious in that regard! You don't want the lawyers to blame you for misguiding them about the contract dates.

Comment

This section is quite important. It sets out notices, fax numbers for notices and addresses. That is the value to the other party if the acknowledgement section has been signed and forwarded.

Frequently, this information is not available until afterwards.

It serves as an indication that the client received their copy of the document and evidence of the authorization to forward it to their lawyer. Although, the provision is somewhat vague when it comes to the issue of whether the brokerage or the client is assuming the responsibility. This matter should always be clarified.


Brian Madigan LL.B., Broker is an author and commentator on real estate matters, if you are interested in residential or commercial properties in Mississauga, Toronto or the GTA, you may contact him through Royal LePage Innovators Realty, Brokerage 905-796-8888
www.OntarioRealEstateSource.com

 

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