Clarity Clauses, Agreements and Documents (Part 1)

The Technology over the Years

The Real Estate and Business Brokers Act (REBBA 2002) was enacted 31 March 2006 and brought into force a number of new provisions for the real estate industry. One new and important change was the requirement that all agreements be legible. Oddly enough, previously, this had not been a requirement. You would have thought that it was rather obvious, but apparently not.

At one time, real estate agents took great care to ensure that agreements were carefully prepared and legible. It was customary to prepare six (6) copies of every agreement, one for each of the parties, one for their agents and one for their lawyers. However, you really wouldn’t want to be the one who had the 6th carbon copy!

So, what happened? Actually, technology! The invention of the fax machine.

With the fax machine came negotiation by fax communication. Instead of six originals, it came down to one document. Now, with back and forth negotiations, each fax is going to be poorer and poorer in quality and legibility. Often, by the time the final deal is struck, no one can read it. Of course, on the clear cut deals where both parties are anxious to close, maybe it doesn’t matter that much. However, just think about a long closing where one party wants out, and the agreement is illegible.

In Court, it is not possible to introduce evidence of prior negotiations (that is the standard rule) only the final agreement, and that is the one that no one can read.

Hence, RECO (The Real Estate Council of Ontario) came to the rescue with one of the many changes to REBBA 2002. There is now an affirmative obligation upon agents to produce a legible agreement.

In response to this issue, OREA (Ontario Real Estate Association) has changed a number of its forms. The font is larger; this will work out well with fax machines and you should be able to have a clear and legible agreement.

The problem, however, is that agents may just fax the document back and forth a few more times before they decide that it’s illegible and they have to start over with a fresh offer.

With email negotiating, various internet signing programs and Covid, there has been a marked departure from hard copies and a movement over to paperless documentation. You would think that the documents are now clear and easy to read? No, that’s not the case. Often, various parties will step aside and use both screen shots and photocopiers as part of the final result. This simply means that even though today we have available excellent opportunities to have clear and unmistakable copies, we still fall short on many occasions.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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