On May 26th, 2015 we wrote a blog post introducing standard form #801 in regards to Bill 55 that will take affect on July 1st, 2015, Ontario Regulation (307/14). We wanted to highlight some of the questions you’ve had in regards to the introduction of this new form.
Q. Do we need to keep copies or equivalent document, not only of a first offer from a buyer, but keep all renditions of the offers in negotiations?
A. Yes there is a requirement to keep a copy of each offer (rendition), however, keep copies or equivalent document of offers received from buyer(s) to be presented to a seller. The Bill 55 amendments do not require keeping copies of each seller offer/counter offer to the buyer. It may be best to use terminology from the act, ‘an offer received’, even though rendition maybe a good term to use in practice. It would be good business practice to keep the negotiation trail documented (s.30Code)
Q. What is the feeling of OREA, if RECO comes in to the listing brokerage office and the listing brokerage only has a final copy of the offer with all changes but does not have a copy of each offer received?
A. OREA comment would be to encourage all members to comply with any/all legislation. OREA does not have comment if a brokerage is not complying to legislation, if there is non-compliance of REBBA 2002, you may wish to speak with RECO to clarify what happens when they discover REBBA 2002 non-compliance. Further, a brokerage does have an obligation to ensure their sales reps are not causing the brokerage to have contravention of REBBA 2002
Q. Must a brokerage have policies and procedures directing their sales reps for offer presentations (Bill 55)?
A. This is a good safeguard, a brokerage should ensure their sales reps are aware of the brokerage obligations and fulfilling or complying with these requirements, having policies/procedures is often helpful resource for sale reps. OREA does not require or comment on policies a brokerage must have. The revision is an obligation of the brokerage, further, a salesperson has the obligation to ensure they do not do or omit doing anything to cause a brokerage contravene REBBA 2002. If policies are in effect with appropriate diligence by the brokerage it may mitigate action against the brokerage
Q. Why is there no seller signature?
A. The legislation does not require sellers’ signature, nor does it state this requirement is for seller counter offers to buyers.
Q. Is everything on this form a mandatory requirement?
A. There are 2 additional areas on the new OREA Standard Form #801 Offer Summary Document, which are in addition to the ‘equivalent document required list of content’. The additions are, a counter offer section, a brokerage rep working with a buyer for counter offer to seller can use a copy of their original Form 801, by completing the counter section, the other additional area is, an identifier as to what happened to the offer after seller presentation, it was felt this added good notation for the brokerage file.
Q. Is this form replacing or same as Form #109, Offer Presentation Acknowledgment?
A. No, this is for new requirements, one way – from a buyer brokerage to the listing brokerage, the form is not intended to go back to the buyer co-operating brokerage, whereas the Offer Presentation Acknowledgement is a co-operating brokerage is requesting a listing brokerage to obtain a seller signature on Form #109, to be sent back to the buyer brokerage/buyer to confirm with seller signature stating they (the seller) saw/rejected the buyers’ offer. It is likely best to keep the forms separate as to each of their purposes.
Q. Should a representative preparing an offer with a buyer also prepare this Form (#801) to have the buyer sign at the time of signing any offer?
A. It may be a good practice to complete and submit a signed Form #801 to a listing brokerage, when submitting a signed buyer’s offer enabling a listing rep to keep the Form #801 / Offer Summary Document, instead of keeping a copy of an entire offer submitted to comply with the new requirements July 1st 2015.
Q. I am having a training session today on Bill 55. I do not seem to be able to find form #801 on the site. I have called three different people at OREA regarding forms and no one is available. How do I find this form?
A. If you click on this link: https://www.orea.com/Members/Standard-Forms login into your OREA portfolio account you will notice the new #801 form at the bottom of the page highlighted in red.
Q. If we receive an offer for my sellers and we counter back then the buyers re-counter and we do this a few times and the deal dies. I know that if we keep form 801 up to date that is sufficient. If we only keep the copy of the offer showing all the counters, would that be acceptable also?
A. Thank you for your enquiry, the new requirement within REBBA 2002 Sec 35 requires a brokerage keep a copy of any offer received for presentation to seller or an having an equivalent summary document. It would not be sufficient to simply keep a single offer showing all revisions. To clarify, at each time the listing brokerage receives an offer to present to their seller (each buyer counter offer included) a full copy of each offer or a summary document pertaining to each offer must be in the brokerage file if RECO were enquiring and seeking/checking for brokerage compliance.
Q. In regards to counter offers, it is my understanding that having a copy of the offer which contains any and all cumulative amendments/ sign backs would be acceptable and meet the obligations under these Bill 55 amendments.
A. A small clarification, to be clear in regards to buyer counter offers. A complete copy of ‘each’ buyer counter offer to the seller is required in a brokerage file to show all offers received for presentation to a seller. A single copy of an unsuccessful offer, in the end, showing all back and forth initialled negotiations would not be sufficient. To summarize, a copy is required to be kept by the receiving brokerage at each point of receiving such offer(s) or counter offer(s), or of course, the alternative of keeping an ‘equivalent summary document’, such as the new OREA Standard Form #801, for each offer/counter offer received for presentation to a seller. Additionally OREA Form 801 provides for recording sign backs.
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