2007 Replacement
Question:
I have a lawyer requesting that ALL Sellers sign the Confirmation of Acceptance line of the Agreement of Purchase and Sale, but it is just the “last person to sign” the document, is this still correct?
Answer:
Remember that there used to be a Confirmation of Execution (COE). That was the “last person to sign”. I raised that issue with OREA in 2005 stating that it was rather silly and foolish and had no meaning. So, in 2007 it was changed by OREA to the Confirmation of Acceptance (COA). Accptance did have meaning and was the “start of the clock”. Unfortunately, it was just changed, no explanation, just changed.
Acceptance involves two steps:
1) signing, and
2) communicating.
If you don’t communicate WITHIN the irrevocable time, then you don’t have a contract. So, sign, “communicate” and then later sign the COA whenever you wish, noting the actual time of the “communication”.
The communication must be in writing, letter, fax, or email. (see s. 3 Notices)
Precisely, when did that take place? That’s the trigger for the commencement of contract and the start of the clock.
Now, you actually appreciate that it has nothing at all to do with the “last person to sign”. Either party could sign the COA indicating the start time, it could be the Offeror or the Offeree.
The problem with the COE to COA changeover was there was no OREA Bulletin that went along with this. There were, however, plenty of posts on the OREA Educational Forum about it, AND all the reasons. Fast forward to Humber College, the OREA Educational Forum was taken down.
COA Summary
- The purpose is to start the clock ticking
- One signature by anyone who truly knows the time of acceptance would be enough
- The APS Form is set up for one signature
- If two or more people sign, it appears that the real estate agent really didn’t know or understand the purpose of the COA
- It can actually be one of the real estate agents, because they would have first hand knowledge
- The document is not necessary to the APS document
- The COA can be signed at anytime after actual acceptance, even two days later
- The key time to insert would be the actual time of acceptance (ie. two days earlier)
- No one would really care what time the actual COA was signed
- We already have the APS in place as an accepted contract, with or without the COA
- The COA does not exist in other jurisdictions
- The COA does not exist in other contracts in Ontario
Concerns about the COA
- It is signed too soon, long before “real acceptance”
- Frequently, it is signed by the Seller (Offeror) immediately after they sign the document
- Who cares when they signed the document?
- We need evidence of the “communication of acceptance” by letter, fax or email
- It is the communication which creates the contract with the Buyer (Offeror)
- Communication MUST take place prior to expiration of the Offer
- Many times, with Offeror immediately signing the COA BEFORE communication, we have the wrong time in the COA
- Sometimes this is a few minutes, sometimes it’s a few hours
- The CORRECT time should be noted, because this might effect the time the deposit is due, when the Buyer falls into breach by reason of a late deposit payment and whether another Offer from another Buyer could be accepted.
Brian Madigan LL.B., Broker