Holiday Closure

The OREA office will close for the holidays at 12 p.m. Tuesday, December 24th.  Normal business hours will resume on Thursday, January 2nd.  Happy Holidays!

Holiday Closure

The OREA office will close for the holidays at 12 p.m. Tuesday, December 24th.  Normal business hours will resume on Thursday, January 2nd.  Happy Holidays!

December 5th - 2007

New and revised forms for 2008 keep pace with the industry

REALTORS® rely on OREA’s standard forms extensively in their day-to-day businesses.

REALTORS® rely on OREA’s standard forms extensively in their day-to-day businesses. As changes occur in the real estate industry and new issues arise on a regular basis, the OREA Standard Forms Committee works to keep the forms relevant and current and creates new forms when necessary. For 2008, seven new forms have been developed and four existing forms received substantial revisions.
 
One form that was in the spotlight over the past year was the Seller Property Information Statement (SPIS) - Form 220. Typically completed by a seller at the time of taking a listing, the SPIS offers protection for all parties, including the REALTORS® involved in a transaction, by providing important information and helping to disclose known defects in a property. The SPIS has become widely accepted as an integral part of a real estate transaction.
 
However, there can be problems associated with the form if the sellers don’t fill them out accurately and completely. Some sellers would rather not disclose a problem that could affect the purchase price or even the saleability of the property. Unfortunately they may leave themselves open to legal action if a problem is discovered and it can be proven that the sellers were aware of it. In fact, the SPIS has been involved in recent court cases. (See REALTOR® EDGE, October 2007).
 
To address these issues, the statement in the introduction of the form that says, “the Seller’s knowledge of the property may be incomplete,” has been expanded to state: “inaccurate or incomplete.” A statement for the Seller to give permission to include the SPIS as an attachment to the MLS® attachment (for those boards whose MLS® has the attachment function) has also been added to comply with privacy concerns; and the form has been reformatted to three pages for readability.
 
Other revisions
Form 244 – Seller’s Direction re: Property/Offers was revised, including a title change, to deal only with the presentation of offers since most real estate boards will not accept a listing if showings are restricted. The Standard Forms Committee also recognized that restricting offer presentations is a controversial topic that could result in questionable practices. In response, a statement was added to the form for the Seller to acknowledge that the brokerage will be complying with board rules regarding the showing of property and the presentation of offers.
 
Two other forms were also revised; the Confirmation of Co-operation and Representation (Form 320) has added a section for comments from the listing broker, and the Listing Agreement for Sale or Lease is now two separate forms for sale (Form 200) and for lease (Form 210).
 
New forms, clauses
In response to frequent requests from OREA members and boards, three new Agreements of Purchase and Sale were created including an Agreement for Mobile Homes on Leased Premises (Form 110), a Co-ownership Building Resale Agreement (Form 115), and an Assignment of Agreement of Purchase and Sale (Form 140). Forms 110 and 115 have the same format as the standard Agreement of Purchase and Sale and Form 140 is very similar to the Co-operative Agreement of Purchase and Sale.
 
The committee also created Form 127 – Acknowledgement re: Condition(s) in Offer. This form allows a buyer to take responsibility for their actions when they are removing a condition that has not been fulfilled or when they are making an offer without a condition thus lessening the liability for the real estate brokerage. Other new forms for 2008 include Amendment to Buyer Representation Agreement (Form 305) and Amendment to Buyer Representation Agreement – Commercial (Form 541).
 
In addition to the new and revised forms, three new standard clauses have been created – one for the extension of the completion date in probate situations, and two clauses related to retrofit certificates. The new forms and clauses are available on the OREA Web site. WebForms and other licensed software programs also have the updated forms available.
 
New consent clauses for MLS® attachments must be explained to seller
Since the implementation of a document attachment feature in the MLS® system of some real estate boards, listing brokerages have been able to provide various documents to potential buyer agents, using the MLS®. Of the various documents that are often attached in MLS® (such as surveys, floor plans, feature sheets, the SPIS, etc.), some may contain a seller’s personal information in addition to information about the property.
 
Additional language has been included in revised Form 200 – Listing Agreement – Authority to Offer for Sale in order to obtain the seller’s consent to permit listing attachments and other documents to be posted on the MLS® system of a board. Since the federal privacy law (PIPEDA) requires the informed consent of the individual concerned, the new consent clause must be brought to the attention of sellers and explained.
 
This new consent clause can be dealt with as follows:

  • Explain to sellers that certain documents will be posted in the MLS® system for the convenience of other REALTORS® who may be representing potential buyers.
  • Explain to sellers that they may strike out the document attachments language from the consent clause if they do no wish to give their consent; and if they do strike it out, then the seller’s documents will not be attached into MLS®. Sellers should be made to understand that even if that language is struck out, those documents would still, of course, be provided to REALTORS with potential buyers, and ultimately to potential buyers; they would just not be posted on the MLS® system.
  • Explain to sellers the document attachments in MLS® would be removed by the board when the property is sold or when the listing is otherwise terminated, or at any point the seller withdraws their consent.

The specific language regarding document attachments in MLS® is shown in the below highlighted text:

11.USE AND DISTRIBUTION OF INFORMATION: The Seller consents to the collection, use and disclosure of personal information by the Brokerage for the purpose of listing and marketing the Property including, but not limited to: listing and advertising the Property using any medium including the Internet; disclosing property information to prospective buyers, brokerages, salespersons and others who may assist in the sale of the Property; such other use of the Seller’s personal information as is consistent with listing and marketing of the Property. The Seller consents, if this is an MLS® Listing, to placement of the listing information and sales information by the Brokerage into the database(s) of the appropriate MLS® system(s), and to the posting of any documents and other information provided by or on behalf of the Seller into the database(s) of the appropriate MLS® system(s). The Seller acknowledges that the MLS® database is the property of the real estate board(s) and can be licensed, resold, or otherwise dealt with by the board(s). The Seller further acknowledges ….

Clause 10 of new Form 210 – Listing Agreement – Authority for Lease contains the same consent language shown above, except the word “seller” has been replaced with “landlord”.
 
Attaching SPIS in MLS®
Since an SPIS contains both sensitive property and personal information, additional consent language was added to revised Form 220 – Seller Property Information Statement to permit attachment of an SPIS to the MLS® system of a board. The specific wording is shown in the below highlighted text:

The Sellers state that the above information is true, based on their current actual knowledge as of the date below. Any important changes to this information known to the Sellers will be disclosed by the Sellers prior to closing. Sellers are responsible for the accuracy of all answers. Sellers further agree to indemnify and hold the Brokerage/Broker/Salesperson harmless from any liability incurred as a result of any buyer relying on this information. The Sellers hereby authorize the Brokerage to post a copy of this Seller Property Information Statement into the database(s) of the appropriate MLS® system and that a copy of this Seller Property Information Statement be delivered by their agent or representative to prospective buyers or their agents or representatives. The Sellers hereby acknowledge receipt of a true copy of this statement.

This gives sellers the opportunity to specifically consider and decide whether they wish to have the SPIS posted as a document attachment in the MLS®, even if they have given their general consent to document attachments in the Listing Agreement. This clause can be explained in the same manner as the more general consent clause in the Listing Agreement.

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Legal Forum tops 3,000 questions Housing starts to dip slightly in 2008

For more information contact

Ontario Real Estate Association

Jean-Adrien Delicano

Senior Manager, Media Relations

JeanAdrienD@orea.com

416-445-9910 ext. 246

Ontario Real Estate Association
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The trademarks REALTOR®, REALTORS®, and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.

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