Humber Real Estate - Course 2, Module 15, Introducing a Residential Agreement of Purchase and Sale exam|120 questions and answers

When an offer is drafted, not signed. What is considered the 'Offer Date'? No. Even if terms are changed on a following day and the offer is re-submitted, the offer date remains the same. Does the date of an offer change? Use the full legal names, and if the individual has one or more middle names, at a minimum identify the initial(s). Tip: Whenever possible, use the full middle name(s) as this helps distinguish the seller or buyer who has a common first and last name. What are the minimum requirements of using a legal name for a seller or buyer when drafting an offer? From the listing information. When drafting an offer, where can the seller(s) full legal name(s) be obtained? TItle To confirm joint ownership of a property, both names must appear on the ________. Seller If only one spouse is on the title, but the property is considered a matrimonial home, the spouse on title is identified as a _________ and that spouse signs the agreement of purchase and sale as a seller. The non-titled spouse is asked to provide their consent. Use the full legal name to identify the corporation and ensure the appropriate officer(s) are identified, and the corporate seal is used with their signature. What are the requirements of signing agreements when a corporation is a seller or buyer? "I/we have the authority to bind the corporation" If a corporation does not have seal to stamp an agreement with, individuals signing can write what phrase on the signature lines on the agreement? - Use the partnership name - Confirm who the partners are, and who has the authority to bind the partnership When preparing an agreement of purchase and sale for a partnership, you should take what steps? - In a general partnership, one partner can sign the agreement which binds the partnership - In a limited partnership, a limited partner may not have this authority What's the difference between a general partnership and a limited partnership? An estate trustee Who is the only person with legal authority to manage or distribute an estate, and who would be named in the deceased's will? Ask for a notarized copy of probate documents to ensure all the trustees have signed and have the power the sell under the will. How can you verify that an individual has the authority to act as an estate trustee? True, but the title cannot be transferred until probate has been obtained. True or false? An estate trustee can list a property for sale prior to obtaining probate? A legal document giving authority for someone to act on behalf of another person. What is a Power of Attorney (POA)? - Obtain an original copy of the Power of Attorney (POA) or a notarized copy of it. - You must also verify that the POA is legally valid, gives the attorney the authority to sign that particular type of agreement and that the POA is still in full force and effect (e.g. hasn't been revoked by the Donor or has not expired if it had an expiry date). How can you verify someone's Power of Attorney (POA)? Valid When the person represented by a Power of Attorney dies, the POA is no longer _________. To remain anonymous or to incorporate a company. Why might a buyer use a trustee to make an offer? - Address - Side of the road the property is fronting on - Municipality, city, township, region - Lot size - Legal description including any easements To ensure a complete description for each property is identified, what information would be included in an agreement of purchase and sale? Put yourself facing the front of the house. The direction you are facing is the side of the road the property is fronting on. How can you determine the direction a house is fronting on? Upper tier When filling out an agreement of purchase and sale, if a property is listed in the lower tier, you should also include the _______ _____. A deed or survey. Note: Secondary documents include the property tax statement or property assessment notice. When looking for a source document to confirm the legal description of a property, what is considered a primary document? In the legal description. In an agreement of purchase and sale, where would an easement be described? T/W - Together with (if the property is the dominant tenement) S/W - Subject to (if the property is the servient tenement) In the legal description of a property on an agreement of purchase and sale, when an easement is described, it can either be T/W or S/T. What do these each mean? 99 - The Land Registry Office M - Identifies the plan of subdivision is registered under Land Titles 5683 - Plans are registered in sequential order, and this plan is number 5683 In the following legal description, what does the '99M-5683' represent? Estimated size. For example, $7,000 per acre. Once a survey has been completed, the lawyers for the seller and buyer will adjust the purchase price based on the terms agreed to. When a larger property is being sold and the overall acreage is not verified, the purchase price could be identified based on the ________ ______. The equity invested into the purchase of the property, and includes any money paid as a deposit. For example, a buyer is purchasing a property for $250k, and submits a $10k deposit upon acceptance of the offer. The buyer is obtaining a new mortgage for $175k, and has sufficient funds to pay the balance of the purchase price. The buyer's down payment is $75k. The deposit of $10k is taken from the buyer's down payment, not in addition to the down payment. What is a down payment defined as? Any monies paid by the buyer toward the purchase price prior to the transaction being completed. What is a deposit defined as? True. In this case a brokerage would retain a copy of the unaccepted offer to show why the funds were deposited and disbursed. Conversely, if a deposit should be returned because a condition on an offer couldn't be fulfilled, the brokerage requires signed, written direction from the seller and buyer, prior to returning the deposit. True or false? If a deposit is identified as "herewith", and the deposit was placed into the brokerage's trust account, but the offer was never accepted, the brokerage can refund the deposit to the buyer without any documentation signed by the seller and buyer. True True or false? A buyer can make a deposit using an electronic funds transfer provided a clause allowing for this method of payment is added to the Schedule A of an agreement of purchase and sale. - Identify schedules sequentially; for example, A, B, C, D, etc. - Ensure all parties to the agreement have initialled each schedule - Attach all schedules in the same sequential order as listed; for example, A, B, C, D, etc. - Ensure each schedule has enough information to be able to connect it to the correct agreement of purchase as sale What are some important things to remember when using schedules in agreements? No, but the time should be reasonable. Is there a minimum irrevocable time required? - Party making the offer - Time limit - Consequences of failure to achieve an accepted offer Irrevocability must address what 3 items? - The offer must be open for acceptance for a reasonable period of time - The acceptance must be communicated to the person making the offer within the time required Based on contract law, what are the 2 requirements for acceptance of an offer? The person making the offer. Who dictates the length of irrevocable time? Any time during the day, and no later than 6 pm. When can the actual transfer of title happen on the day of closing (the completion date)? Residential Tenancies Act If a buyer requires vacant possession, the completion date must not conflict with the requirements for notice under the __________ __________ _______. 60-day written notice (60 days from the date on which the rent is paid) If a tenancy is month-to-month, how much notice must a tenant be given to vacate a property? The end of the term. If a tenancy is within the term of a lease, the notice to vacate cannot be effective any earlier than when? Any documentation connected to the transaction. What are notices? Once sent by email or fax, and all signatures on the document are deemed to be original. When is a notice considered to be sent? It's been delivered personally or hand-delivered to the seller's or buyer's address for service provided in the agreement of purchase and sale. If a notice isn't faxed or emailed, a notice is deemed received only when? True. In these instances, the notice is not deemed received until the seller or buyer receives the notice. This can be done by inserting the seller's or buyer's information in the fax or email address portion of the clause or by delivering the notice to the party's address for service. True or false? Under multiple representation, a brokerage is not allowed to act on behalf of the buyer or seller for the purpose of giving and receiving notice.