Question:
Brokerage A has an accepted offer on their listing that includes a condition on the sale of a Buyer’s property with a 48 hour escape clause.
Brokerage B gets an accepted offer on this same property with a clause stating that the Seller will deliver notice to remove condition to Buyer of the previous agreement within 2 hours of acceptance and the offer is conditional on the Seller being released from the previous agreement for 52 hours following acceptance.
Brokerage A states that the clock starts ticking when the deposit is received (ie. Tuesday this week when the bank opens to wire it since Monday is a holiday) rather than 2 hours following the time on the Confirmation Acceptance.
In my opinion, the clock starts at the time listed on the Confirmation of Acceptance and the delivery date of the deposit is irrelevant to this. If the deposit isn’t received then the Buyer would be in breach of a term of the contract. If the listing Brokerage wanted the notice to be two hours following receipt of the deposit, then they should have reworded the clause to say following receipt of the deposit rather than following acceptance.
Answer:
Let’s look at the Notices provision in the standard form OREA Agreement of Purchase and Sale.
Notices
“3. NOTICES: The Seller hereby appoints the Listing Brokerage as agent for the Seller for the purpose of giving and receiving notices pursuant to this Agreement. Where a Brokerage (Buyer’s Brokerage) has entered into a representation agreement with the Buyer, the Buyer hereby appoints the Buyer’s Brokerage as agent for the purpose of giving and receiving notices pursuant to this Agreement. The Brokerage shall not be appointed or authorized to be agent for either the Buyer or the Seller for the purpose of giving and receiving notices where the Brokerage represents both the Seller and the Buyer (multiple representation) or where the Buyer or the Seller is a self represented party. Any notice relating hereto or provided for herein shall be in writing. In addition to any provision contained herein and in any Schedule hereto, this offer, any counter-offer, notice of acceptance thereof or any notice to be given or received pursuant to this Agreement or any Schedule hereto (any of them, “Document”) shall be deemed given and received when delivered personally or hand delivered to the Address for Service provided in the Acknowledgement below, or where a facsimile number or email address is provided herein, when transmitted electronically to that facsimile number or email address, respectively, in which case, the signature(s) of the party (parties) shall be deemed to be original.”
OK, that was a “mouthful”, let’s examine it in more detail (titles mine):
3. NOTICES:
Appointment Listing Brokerage
The Seller hereby appoints the Listing Brokerage as agent for the Seller
for the purpose of giving and receiving notices pursuant to this Agreement.
Appointment Buyer’s Brokerage
Where a Brokerage (Buyer’s Brokerage) has entered into a representation agreement with the Buyer,
the Buyer hereby appoints the Buyer’s Brokerage as agent
for the purpose of giving and receiving notices pursuant to this Agreement.
Multiple Representation (or SRP) Appointment Not Allowed
The Brokerage shall not be appointed or authorized to be agent for either the Buyer or the Seller
for the purpose of giving and receiving notices
where the Brokerage represents both the Seller and the Buyer (multiple representation)
or where the Buyer or the Seller is a self represented party.
In Writing
Any notice relating hereto or provided for herein shall be in writing.
All Documents
In addition to any provision contained herein and in any Schedule hereto,
this offer, any counter-offer, notice of acceptance thereof
or any notice to be given or received pursuant to this Agreement or any Schedule hereto (any of them, “Document”)
When
shall be deemed given and received when
delivered personally
or hand delivered to the Address for Service provided in the Acknowledgement below,
or where a facsimile number or email address is provided herein, when transmitted electronically to that facsimile number or email address, respectively,
in which case, the signature(s) of the party (parties) shall be deemed to be original.
Comment
The requirements for acceptance are:
- It’s in writing,
- Delivered personally,
- Delivered to the address for “service”,
- Delivered by fax, (at the time of transmission)
- Delivered by email, (at the time of transmission).
The Confirmation of Acceptance (COA) is usually completed ahead of the above, not afterwards, making it incorrect (but often close, out by a few hours) most of the time.
What do Listing agents often do? They sign the COA right after the client has executed (signed) the document. They never get to the next part “DELIVERED”. That step is just skipped most of the time.
Brian Madigan LL.B., Broker