In today’s economy, there is a good chance you have dealt (or will eventually deal) with listing or selling a property in financial distress.
To navigate these muddy waters, check out these tips below.
RMS requirements
In general, foreclosures, judicial sales and civil enforcements are not exempt from CREB® Rules when it comes to showings. As well, RMS obligations must also be met. Some exceptions include:
- The court order indicates that showings are not permitted;
- Alberta Health Services issues a restriction on entering the property for safety reasons; or
- There is a police order that restricts access.
In these cases, the document that states restricted access must be uploaded to the supplements field in Matrix™.
Accessing a property
If a seller or occupant is not cooperative when you try to access a property, it’s important to communicate your obligations under the MLS® System Rules.
Once you provide this information to the seller or seller’s representative (such as a lawyer), the court can add the restriction to the order.
Showings
If a property cannot be shown within the 24-hour window required by the CREB® Rules, the listing should be withdrawn by the listing agent. The problem should be resolved within the ten-day window afforded by CREB® Rules.
If there is only a concern about buyers viewing the property but there is no order prohibiting it, the listing agent is free to explain any concerns or special instruction in the private remarks section.
Partial interest judicial sales
These sales will be listed under “Equitable Interest” in the ownership interest field in Matrix™.
This happens when the court orders an individual named on title to liquidate their interest in the property to satisfy creditors who have obtained “Judgment” and a “Writ of Execution” against the title holder.
Property redemption
With judicial sales, the owner may, in very rare cases, still have the right to redeem the property- even if the court has accepted a conditional purchase contract on behalf of the lender. In the vast majority of cases, an unconditional sale to a bona fide purchaser, will be upheld by the court and the equity of redemption will be irrevocable extinguished.1
It is important to discuss the concept of redemption by the property owner with your clients and include appropriate clauses in the purchase contract. Regardless of the likelihood of any outcome, REALTORS® should discuss all potential outcomes with their clients.
When working with these types of properties, keep in mind that certain items in or on the property, such as appliances, may not be there at the time of possession. Make sure to tell your clients this to avoid any miscommunication.
1 Revised wording of this section was approved by CREB®’s legal counsel.
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