Real Property Reports (RPR), municipal compliance and purchase contracts are part of a REALTORS® repertoire. These items ensure the buyer gets exactly what they expect when they take ownership of their new home.
But sometimes things don’t go according to plan, and when a non-compliant RPR is discovered with no time to get a new one, members must be diligent in dealing with this in the purchase contract.
Non-compliant or absent real property reports
The goal: Have the current and compliant RPR in hand before listing a property.
The reality: A hot market, an excited seller, and a waitlist to get new RPRs and compliance from the city.
The issue: Accepting offers without a compliant RPR.
How to deal with it: Because sellers are obligated to provide a compliant RPR at the time of listing or shortly after, it’s assumed that by the time the property sells, the RPR won’t be an issue. But if a property moves so quickly, there isn’t time to get a new RPR with compliance before offers start coming in; you’ll need to address this in the purchase agreement.
Are parties willing to accept the RPR “as is” at the point of offer? Will they expect a new RPR to be provided before possession? What are they comfortable with if a compliant RPR can’t be provided before possession? Is title insurance an option?
Depending on the circumstance a member faces will impact the type of adjustments that need to be made to the contract. Pay specific attention to clause 10.2 of the AREA purchase contract and speak with your broker or lawyer about adjusting the contract before final acceptance if you don’t have a current and compliant RPR in hand when you receive or make an offer.
Did you know?
If you do not appropriately deal with a non-compliant RPR in the purchase agreement, there may be holdbacks and/or delays in closing. Both holdback and closing delays can impact when the lawyer can release funds, which could mean brokerages have to wait to get paid.
We’ve learned that the Lethbridge/Macleod Bar Association has issued an update which states that beginning Jan. 1, 2024, if there is a holdback on a purchase and all of the money is not releasable on possession, real estate commissions may not be released. We encourage our members to speak to their lawyers to learn more about what to expect when a holdback is in play and if they’re subject to these time restrictions in releasing commissions.
Compliant RPR?
Suppose you have an RPR with municipal compliance. In that case, it might still be beneficial to have all parties acknowledge they agree and accept the RPR by adding a term to the purchase agreement with the specific dates of the RPR and compliance and that it satisfies the appropriate sections of the contract. We recommend getting a legal opinion for specific term phrasing.
To learn more, join Jeff Kahane on Wednesday, Nov. 8, where he’ll break down the Residential Purchase Agreement and explain why each part of the purchase agreement is important.
Non-compliant or absent real property reports
The goal: Have the current and compliant RPR in hand before listing a property.
The reality: A hot market, an excited seller, and a waitlist to get new RPRs and compliance from the city.
The issue: Accepting offers without a compliant RPR.
How to deal with it: Because sellers are obligated to provide a compliant RPR at the time of listing or shortly after, it’s assumed that by the time the property sells, the RPR won’t be an issue. But if a property moves so quickly, there isn’t time to get a new RPR with compliance before offers start coming in; you’ll need to address this in the purchase agreement.
Are parties willing to accept the RPR “as is” at the point of offer? Will they expect a new RPR to be provided before possession? What are they comfortable with if a compliant RPR can’t be provided before possession? Is title insurance an option?
Depending on the circumstance a member faces will impact the type of adjustments that need to be made to the contract. Pay specific attention to clause 10.2 of the AREA purchase contract and speak with your broker or lawyer about adjusting the contract before final acceptance if you don’t have a current and compliant RPR in hand when you receive or make an offer.
Did you know?
If you do not appropriately deal with a non-compliant RPR in the purchase agreement, there may be holdbacks and/or delays in closing. Both holdback and closing delays can impact when the lawyer can release funds, which could mean brokerages have to wait to get paid.
We’ve learned that the Lethbridge/Macleod Bar Association has issued an update which states that beginning Jan. 1, 2024, if there is a holdback on a purchase and all of the money is not releasable on possession, real estate commissions may not be released. We encourage our members to speak to their lawyers to learn more about what to expect when a holdback is in play and if they’re subject to these time restrictions in releasing commissions.
Compliant RPR?
Suppose you have an RPR with municipal compliance. In that case, it might still be beneficial to have all parties acknowledge they agree and accept the RPR by adding a term to the purchase agreement with the specific dates of the RPR and compliance and that it satisfies the appropriate sections of the contract. We recommend getting a legal opinion for specific term phrasing.
To learn more, join Jeff Kahane on Wednesday, Nov. 8, where he’ll break down the Residential Purchase Agreement and explain why each part of the purchase agreement is important.
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