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Salt Spring Island Real Estate

MLS homes for sale by Scott Simmons

Is an offer an sale?

January 26, 2018 By Scott Simmons Leave a Comment

This last month I had an accepted offer on a home and had a backup offer come in.  The backup offer was a very weak offer because the condition precedent (subject to clause) was so subjective.  It was subject to the buyer viewing and liking the lot.  Normally no one would take an offer like this seriously but it was a backup and had just a 3 day subject time so it was accepted.  The conditions precedent (subject to clauses) cannot be subjective they have to be distinct.

This just came out from the BCREA and covers the finer points of a subjective subject to clauses and options.

This would have worked for me a few years back when a buyer bought a place in 4 days and would not deposit and would not read the strata docs.  We had no consideration and no contract only an offer.  It went through but he could have backed out.  It was an odd deal one that I would have rather like to not be party to but odd things do happen.

Read on from the BCREA Cheers Scott.

OFFER VS. OPTION VS. CONTRACT OF PURCHASE AND SALE

Mike ManganSome conditions precedent are so imprecise or subjective that they prevent the formation of a contract. Pending the weak subject’s removal, we have only, in law, an offer. Removing the subject in question amounts to accepting the offer. Until the buyer delivers written notice removing the offending subject by the subject removal deadline, there is no contract. A famous example is,1

. . . [s]ubject to the approval of the president of the corporate purchaser.

Since fulfillment of this condition precedent depends on how someone feels, it is subjective. In a dispute over a subjective subject clause, one side typically obtains legal advice to leverage the arrangement’s status as an offer to their advantage. A seller might cancel the deal before the buyer removes the problematic subject clause, thereby revoking the offer.2 Or, a buyer might do nothing to fulfill the feeble subject, letting the offer, in law, lapse.

Suppose that, as the result of a subjective subject clause, all we have, in law, is an offer. What if the seller, for consideration or under seal, promises not to revoke that offer? Now, we have an option:3

Where consideration is provided for leaving the offer open, the transaction is known as an option. In essence, it consists of two contracts, one the agreement regarding the offer, the second the contract arising if that offer is accepted.

With this in mind, in 2003 BCREA added to the Contract of Purchase and Sale what is now section 22.4 Section 22 essentially provides that if, pending removal of a subjective subject clause, there is only an offer, the seller promises under seal not to revoke that offer before the subject removal deadline.

In Gordon Nelson Inc. v. Cameron, a standard form contract was subject to the buyer, in its sole discretion, finding suitable financing.5 The buyer paid a $1 million deposit. In addition to the pre-printed section 22, the parties added this comparable term:

Upon acceptance of this offer, the Buyer hereby agrees that the sum of Ten Dollars ($10.00) of the initial deposit shall be non-refundable to the Buyer and the Seller acknowledges receipt of such sum as consideration for the Seller . . . allowing the Buyer the benefit of the Buyer’s subjects and conditions and agreeing that the Seller’s acceptance of this offer is irrevocable.

The buyer did not remove its financing subject because it couldn’t find suitable financing. The sellers refused to return the deposit, claiming that the buyer breached the contract by failing to use sufficient effort to remove their financing subject.6 The buyer sued to recover its deposit.

The court found that the subjective subject clause, coupled with the term comparable to our section 22, created an option, not a contract. There was not yet any contractual obligation to use specific efforts to obtain financing. As long as the buyer acted honestly, it could choose not to exercise its option. The court ordered the $1 million deposit and accrued interest, returned to the buyer, minus the $10 payment to the sellers.

Unless the parties want an option, a REALTOR® should avoid a subjective subject clause. Instead, when apt, use one of the more objective subject clauses recommended by the Real Estate Council of British Columbia in the Professional Standards Manual.7 Council’s wording is far more likely to produce an enforceable contract.

Mike Mangan
B.A., LL.B.

1. Wiebe v. Bobsein, (1985) 20 D.L.R. (4th) 475 at para. 15 (BCCA).
2. For more information, see Real Estate Council of British Columbia, “Subject to” Clauses — General Information” Professional Standards Manual, 7th edition, online athttps://www.recbc.ca/psm/how-the-law-works.
3. CCH Canadian Limited, British Columbia Real Estate Law Guide, looseleaf, Vol. 1, (North York, CCH Canadian Limited, 2000) at paragraph 3055.
4. In the Contract of Purchase and Sale — Commercial Real Estate, see section 40.
5. Gordon Nelson Inc. v. Cameron, 2017 BCSC 1269.
6. For information when a party is justified in refusing to remove a subject clause, see Legally Speaking No. 497 in October 2017.
7. Professional Standards Manual.

“Copyright British Columbia Real Estate Association. Reprinted with permission.” BCREA makes no guarantees as to the accuracy or completeness of this information or the currency of legal information.

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CRITICAL BUYING INFO

Two things buyers should know before they offer:

Price History

Total time on market

Forms for the new BC Real Estate rules
Disclosure-of-Representation-in-Trading-Services
Agreement-Regarding-Conflict-of-Interest-Between-Clients
Disclosure-of-Risks-to-Unrepresented-Parties
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Salt Spring Real Estate Market Report

If you are looking for Salt Spring Island Real Estate it would be well worth your time to check out my Salt Spring Market Report pages.

To help you search for a Salt Spring home for sale I have two systems you can use.  One is a map based mobile search system for tablets and/or phones. This system works really well if you are on Salt Spring, as it will automatically show you properties as you drive around the island.

The other system is a data base (Advanced MLS system or PCS) for laptops or desktops.

These two systems display information in real time, which allows you to view new listings within one second of them coming on the market. You will also find the “sold” prices of homes, as well as other useful information.

Radio Real Estate Shows

TV show Realty Reality on Salt Spring

So glad shooting for the new Real Estate TV show “Realty Reality” is over. It was a lot of work. It all looks so easy on TV but in reality it was not easy. I think they were waiting for the “moment” to happen. You know the big fall down the steps or fall of […]

Home inspection on Salt Spring Island

Home inspection on Salt Spring Island happened yesterday at a 42 year old log home. To accomplish the home inspections the buyer brought in a  Home Inspector, Geo-technical Engineer and a local Salt Spring contractor. Jeff the home inspector tells the story about the bag of Gold he found in an attic; gold story How […]

Salt Spring home face lift

My clients bought this dated salt spring home a month ago and are upgrading it.  The home was built in 1996 and is structurally 100% perfect.  It seams as if the original owner skimped on the finishing.   The main up grade Alex Denny (salt spring master carpenter) will be doing for the owners is re-finishing […]

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Salt Spring rental homes by the numbers

July 18, 2018 By Scott Simmons 2 Comments

I get many people asking me about buying a rental home on Salt Spring and usually spend a lot of time answering all their questions.  So in this post, I hope to cover some of the factual information. Here are the typical questions and basic answers; What is the rental market like on Salt Spring?  […]

Ban on Dual Agency BC

June 16, 2018 By Scott Simmons 2 Comments

On June 15th, 2018 the ban on dual agency just came into effect in BC. Here is a post I wrote about how the new rules will change the way I do business on Salt Spring New Rules for BC Real Estate As a continuation of the New Rules post, what happens if we are […]

New Rules for BC Real Estate

June 16, 2018 By Scott Simmons Leave a Comment

On the 15th of June 2018, the new rules governing BC real estate have come into effect. If you come to Salt Spring to look at homes and or land Scott will go over the form below and ask you if you would like agency representation and ask you to sign this Disclosure-of-Representation-in-Trading-Services as a represented part […]

Salt Spring Island Trust Land Use Zoning bylaw 355

February 17, 2018 By Scott Simmons Leave a Comment

On Salt Spring Island the Island Trust is responsible for our local zoning.  You can find our zoning info here at the Salt Spring Island Trust LUB 355. The bylaw has maps that cover every part of the island.  Believe it or not every few months or so I get an email from someone saying […]

Is an offer an sale?

January 26, 2018 By Scott Simmons Leave a Comment

This last month I had an accepted offer on a home and had a backup offer come in.  The backup offer was a very weak offer because the condition precedent (subject to clause) was so subjective.  It was subject to the buyer viewing and liking the lot.  Normally no one would take an offer like […]

More Posts from this Category

 

SALT SPRING NEWS

Salt Spring Housing Crisis explained

July 12, 2018 By Scott Simmons 2 Comments

Is Salt Spring in the middle of a housing crisis?  It all depends on who you talk to and what one defines as a crisis. If you move to Salt Spring and have limited funds and are looking to rent a home at about $1000 per month your probably out of luck.  There are basically […]

Candidate for Regional Director CREA

March 7, 2017 By Scott Simmons Leave a Comment

I’m running for the position of board member Regional Director for BC for the Canadian Real Estate Association (CREA).  Below is my official platform after edits suggested by CREA lawyers. My name is Scott Simmons. I’m a REALTOR® on Salt Spring Island BC. If you go to the REALTOR.ca site and put in Salt Spring […]

CRD sewer and solid waste

January 23, 2017 By Scott Simmons Leave a Comment

The nuts and bolts of local goverment are really the non glamours basics of water, sewer and garbage (solid waste).   The CRD is the local service provider for Salt Spring.  On the night of 24 Nov 2016 Russ Smith Senior Manager, Environmental Resource Management for the CRD put on a waste presentation.  Here is a […]

Incorporation – A Third Option: Self-governance with contracted services

May 11, 2016 By Scott Simmons Leave a Comment

This was just posted on the Salt Spring exchange in 4 parts.  I have permission from John Gauld the author to publish this document on my Salt Spring web site;   SSI is known as a community that questions conventional practices and is creative and innovative in its response to community challenges. Perhaps the up-coming […]

Salt Spring’s new SSIWPA PAC

November 4, 2014 By Scott Simmons 2 Comments

If you live on Salt Spring you have to get used to all the acronyms.  If you have not heard of SSIWPA it’s because it’s new.   SSIWPA stands for Salt Spring Island WaterShed Protection Authority.  Today  was the first meeting of the SSIWPA PAC (Public Advisory Committee). The ideal behind SSIWPA is that it […]

 

Critical Salt Spring Buying Info

Ban on Dual Agency BC

June 16, 2018 By Scott Simmons 2 Comments

On June 15th, 2018 the ban on dual agency just came into effect in BC. Here is a post I wrote about how the new rules will change the way I do business on Salt Spring New Rules for BC Real Estate As a continuation of the New Rules post, what happens if we are […]

New Rules for BC Real Estate

June 16, 2018 By Scott Simmons Leave a Comment

On the 15th of June 2018, the new rules governing BC real estate have come into effect. If you come to Salt Spring to look at homes and or land Scott will go over the form below and ask you if you would like agency representation and ask you to sign this Disclosure-of-Representation-in-Trading-Services as a represented part […]

Sun Path Chart

Does the home get sunlight?

February 28, 2013 By Scott Simmons 1 Comment

If you’re planning to live on Salt Spring year-round, one of the most important things to consider when buying a property is SUNLIGHT. Do the neighbor’s trees or a mountain block the sun during the winter months?  According to Salt Spring real estate mythology, “If they buy in August, they will list in November and […]

Aggregate Days on the Market

January 2, 2012 By Scott Simmons Leave a Comment

What are “aggregate days on the market”? On the Victoria Real Estate board an agent can “Re-List” a property for a mere $25 fee.  An example would be if a home has been listed on the board for 180 days the listing can be taken off the market and then “Re-Listed” and appear to be […]

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