Clarity Clauses, Agreements and Documents (Part 3)

The Law

A number of individuals wanted to know the source of the law relating to legible agreements.

It is contained in Regulation 585 (O. Reg. 580/05) The Code of Ethics under the Real Estate and Business Brokers Act. Here is the provision set out verbatim:

Written and legible agreements

27. (1) A registrant who represents a client in respect of a trade in real estate shall use the registrant’s best efforts to ensure that,
(a) any agreement that deals with the conveyance of an interest in real estate is in writing; and
(b) any written agreement that deals with the conveyance of an interest in real estate is legible. O. Reg. 580/05, s. 27 (1).
(2) Subsection (1) applies, with necessary modifications, if a brokerage and a customer have an agreement that provides for the brokerage to provide services to the customer in respect of any agreement that deals with the conveyance of an interest in real estate. O. Reg. 580/05, s. 27 (2).

By way of comment, all agreements concerning the sale of land must be in writing. That requirement is contained in the Statute of Frauds. And, by necessary implication all agreements had to be legible. What’s the point in having an illegible document? It’s meaningless!

So, what is the difference in the law? Previously, an agent would be liable in damages by way of breach of contract and in tort to a client. Now, even if nothing goes wrong, RECO upon audit and inspection of a brokerage can charge agents with an offence under the legislation and they would be subject to disciplinary sanctions.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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