Sale and Purchase of Real Estate | By Lawyers
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Sale and Purchase of Real Estate

AB

A complete matter management solution for practitioners running a busy conveyancing practice in Alberta.

2 Matter Plans

Overview

The sale and purchase of real estate commentaries cover all the common and less frequent issues that arise in conveyancing matters. Each step of the transaction is outlined in sequential order, with all required precedents conveniently located, along with links to the relevant sections of the comprehensive commentary.

The Reference materials folder includes guidance on electronic signing and remote witnessing, and the Getting the matter underway folder contains essential compliance and client engagement documents. The comprehensive Retainer Instructions ensure that all necessary information is gathered from the client at the outset of the matter.

Precedents in this publication include:

  • A full suite of letters to:
    • clients;
    • real estate agents; and
    • lenders.
  • Library of additional clauses;
  • Declaration of trust for a purchaser;
  • Mutual termination agreement.
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2 Matter Plans Included

  • Item icon ALERTS - Nil
  • Item icon Full Commentary - Sale of Real Estate (AB)
  • Folder icon Reference materials
    • Item icon AI Prompts
    • Item icon Electronic Signing and Remote Witnessing
    • Item icon Further information
  • Item icon Overview
    The purpose of a real estate transaction is to transfer the title and use of real property from one party to another. Despite the trend toward making it so, conveyancing is not adversarial. This is mainly due to contractual warranties, and the practice of raising all requisitions on title before ...

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  • Item icon Summary of the process
    The usual steps in a sale of real estate matter include:

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  • Folder icon A. Getting the matter underway
    • Item icon File cover sheet - Sale of real estate
    • Item icon To do list - Sale of real estate
    • Item icon First steps
    • Item icon Client details, verification, and source of funds
    • Item icon Retainer instructions - Sale of real estate
    • Item icon Conflict of interest check
    • Item icon Initial letter to client enclosing retainer agreement and authority
    • Item icon Retainer agreement - Alberta
    • Item icon Scope of work - Sale of real estate
    • Item icon Authority for records
    • Item icon Affidavit - Identification by video conferencing
    • Item icon Time and costs estimates
    • Folder icon If required - Costs disclosure update and a non-engagement letter
      • Item icon Letter to client updating costs disclosure
      • Item icon Non-engagement letter
    • Folder icon General deeds, agreements, execution clauses, and statutory declarations
      • Item icon Deeds and Agreements
      • Folder icon Deeds
        • Item icon Confidentiality deed
        • Item icon Deed for general use
        • Item icon Deed of assignment of agreement
        • Item icon Deed of gift
        • Item icon Deed of guarantee
        • Item icon Deed of release
        • Item icon General deed of indemnity
        • Folder icon Library of standard clauses for deeds
          • Item icon Amendment clause
          • Item icon Confidentiality clause for defined information - All parties
          • Item icon Confidentiality clause for defined information - One party
          • Item icon Confidentiality clause for terms of agreement - All parties
          • Item icon Confidentiality clause for terms of agreement - One party
          • Item icon Costs clause
          • Item icon Counterparts clause
          • Item icon Dispute resolution clause
          • Item icon Events beyond control clause
          • Item icon Governing law and jurisdiction clause
          • Item icon Interpretation clause
          • Item icon No assignment clause
          • Item icon Notices clause
          • Item icon Severance clause
          • Item icon Waiver clause
          • Item icon Whole agreement clause
      • Folder icon Agreements
        • Item icon Agreement for general use
        • Item icon Heads of agreement
        • Item icon Non-disclosure agreement - Formal
        • Item icon Non-disclosure agreement - Informal
        • Folder icon Library of standard clauses for agreements
          • Item icon Amendment clause
          • Item icon Confidentiality clause for defined information - All parties
          • Item icon Confidentiality clause for defined information - One party
          • Item icon Confidentiality clause for terms of agreement - All parties
          • Item icon Confidentiality clause for terms of agreement - One party
          • Item icon Costs clause
          • Item icon Counterparts clause
          • Item icon Dispute resolution clause
          • Item icon Events beyond control clause
          • Item icon Governing law and jurisdiction clause
          • Item icon Interpretation clause
          • Item icon No assignment clause
          • Item icon Notices clause
          • Item icon Severance clause
          • Item icon Waiver clause
          • Item icon Whole agreement clause
      • Folder icon Execution clauses
        • Item icon Execution clauses - Agreements and contracts
        • Item icon Execution clauses - Deeds
      • Folder icon Statutory declaration
        • Item icon Statutory declaration
      • Item icon Standard annexure note for documents
  • Folder icon B. Contract considerations
    • Item icon Contract considerations
      The contract between a vendor and purchaser is the primary document setting out the parties’ obligations. The sale process begins when a purchaser makes an offer to the vendor by submitting a contract that may be accepted by a date set out in the terms. Typically, where realtors are involved, they ...

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    • Item icon Considerations for commercial properties
      Building condition assessment A building condition assessment is usually done as part of due diligence before finalizing the transaction. It assesses the property’s general condition, including structural and non-structural components and electrical and plumbing systems. This allows a purchaser to ...

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    • Item icon Property
      Identification Those who cannot imagine a mistake in this area easily overlook the need to identify the property. It may seem inconceivable that a contract can relate to a property other than the one inspected by the purchaser, but it has happened.

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    • Item icon Title
      The Land Titles Act 2000 covers the registration of title for property. The title for land is typically referred to as a certificate of title or land title certificate. This document provides legal proof of ownership and shows any encumbrances or liens on the property, such as mortgages or ...

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    • Item icon Condominium title
      The acts governing the establishment and regulation of condominiums are:

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    • Item icon Tax considerations
      The tax consequences need to be considered with each sale.

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    • Item icon Forming the contract
      Form of contract While the form of contract is not prescribed by law, various requirements are. There are implied conditions for entering an enforceable contract. Provided the contract complies with these various conditions and the other formality requirements discussed below, the contract will be ...

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    • Item icon Alberta Real Estate Association - Residential Purchase Contract
    • Item icon Alberta Real Estate Association - Commercial Purchase Contract
    • Item icon Representations and warranties
      The AREA standard form contracts contain representations and warranties by the vendor, which include that:

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    • Item icon Inclusions
      This is often an issue that leads to disputes. All unattached goods included in the purchase price remaining at the property on the completion day should be listed in the purchase contract. Attached goods that are excluded should also be listed to avoid any disputes between the parties. Listing the ...

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    • Item icon Terms and conditions
      Implied terms Courts are generally reluctant to interfere with a party’s freedom to contract, which is paramount. Courts cannot imply terms into a contract that are inconsistent with its express terms. However, a court may imply a term to give contract business efficacy. The court can also imply a ...

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    • Item icon Initial letter to purchaser's lawyer enclosing property survey
    • Item icon Initial letter to purchaser's lawyer seeking amendment to contract
    • Item icon Execution including electronic signatures and power of attorney
      The Statute of Frauds requires that a contract for the transfer of land must be in writing and signed by the parties or their duly authorized agents. Electronic contracts and electronic signatures are acceptable.

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    • Folder icon If required - Power of attorney
      • Item icon Enduring power of attorney for client 1
      • Item icon Enduring power of attorney for client 2
      • Item icon General power of attorney for client 1
      • Item icon General power of attorney for client 2
    • Item icon Letter to client requesting appointment to sign contract and bring loan number
    • Item icon Deposit
      The AREA standard form sets out the terms of trust for the deposits paid in the purchase contract. The parties appoint a trustee for the deposit money and then indicate the amount of the deposit and the date that the deposit is to be paid. If the purchaser fails to pay it, the vendor may void the ...

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    • Item icon Method of offering and accepting contract
      In person, by courier, fax, or email Offering and accepting a contract can be effected personally, by courier, fax, or email, as is common when the parties’ lawyers or realtors are distant. The lawyers or realtors email each other copies of the executed contract, refer to any special conditions, ...

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    • Item icon Letter to purchaser's lawyer enclosing signed contract
    • Folder icon If required - Corporate resolutions
      • Item icon Corporate resolution for vendor - Commercial real estate sale
    • Folder icon If required - Library of additional clauses
      • Item icon Development clauses
      • Item icon Board approvals
      • Item icon Competition Act approval
      • Item icon Planning consents
      • Item icon Representations and warranties
      • Item icon Rezoning condition
      • Item icon Severance condition
    • Folder icon Library of other contracts, deeds, and agreements
      • Item icon Agreement for sale of chattels and fixtures
      • Item icon Agreement to assign agreement of purchase and sale
      • Item icon Agreement to assign contracts
      • Item icon Agreement to assign due diligence material
      • Item icon Agreement to assign encumbrances
      • Item icon Agreement to assign leases
      • Item icon Agreement to assign rights and warranties
      • Item icon Agreement to assume existing agreements
      • Item icon Amendment to purchase contract
      • Item icon Assumption of covenant
      • Item icon Consent to assignment of agreement
      • Item icon Non-merger agreement
      • Item icon Realty tax agreement
      • Item icon Reconveyance agreement
      • Item icon Restrictive covenant agreement
    • Item icon Auctions, in family transfers, partition, pre-construction, and liens
      Auction contract Auction contracts are no different from any other type of contract. Until a party signs the contract, it is not enforceable against that party.

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    • Item icon Home builder liability
      Residential Protection Program The Residential Protection Program covers the registration, licensing, and regulation of companies and people who build and sell new homes. See the Filing complaints with the Residential Protection Program page on the Alberta government website.

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    • Folder icon If required - Options
      • Item icon Options and rights of first refusal
        Rights of first refusal An owner of land may grant a right of first refusal. This imposes an obligation on the owner to give that person the first chance to buy the property on the same terms and conditions as offered to the market. A right of first refusal creates an equitable property interest in ...

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      • Item icon Nomination notice
      • Item icon Option notice
      • Item icon Option to purchase agreement
      • Item icon Put and call option agreement
  • Folder icon C. Mid transaction
    • Item icon Notice and caveat
      The cornerstone of the Torrens system is the principle of indefeasibility of title. The government guarantees that the register is accurate and that the registered owner has the title shown, subject to the encumbrances registered on title and certain qualifications set out in legislation. The ...

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    • Item icon Vendor's authority to government authorities to provide information
    • Item icon Caveat Forbidding Registration and Affidavit in Support of Caveat – Service Alberta
    • Item icon Caveat Forbidding Registration and Affidavit in Support of Caveat sworn by video conferencing – Service Alberta
    • Item icon Transfer of Caveat and Affidavit of Attestation of an Instrument – Service Alberta
    • Item icon Caveat Notice to Take Proceedings
    • Item icon Certificate of Lis Pendens – Service Alberta
    • Item icon Withdrawal of Certificate of Lis Pendens
    • Item icon Land titles – Service Alberta
    • Folder icon If required - Discharge of mortgage
      • Item icon Discharging mortgages
        It is standard procedure for the vendor’s lawyer to write to the mortgagees to arrange the discharge of their mortgage security on title. The AREA contracts allow the vendor’s lawyer to pay and discharge the vendor’s financial obligations related to the property with use of the purchase price ...

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      • Item icon Letter to current lender requesting mortgage statement for discharge
      • Item icon Discharge of Mortgage or Encumbrance
      • Item icon Affidavit of Attestation of an Instrument
      • Item icon Land titles – Service Alberta
      • Item icon Assignment of mortgage
    • Item icon Requisitions and replies
      Requisitions are written requests by the purchaser to the vendor about the property. An objection is an assertion by the purchaser that they cannot complete the contract due to a defect. Requisitions and objections should be made within a reasonable time.

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    • Item icon Letter to purchaser's lawyer replying to requisitions
    • Item icon Insurance and risk
      Historically, the common law held that risk passed on the signature of the purchase contract and that, while the vendor was in the position of a trustee for the purchaser during the contract period, the risk of any deterioration to the property during that period fell on the purchaser. The AREA ...

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    • Item icon Variations, nomination, assignment, novation, and default by nominee
      Variation of contract Parties to a contract may agree to vary or amend the contract. They might also authorize an agent, like their lawyer, to agree to a contract variation. Any representative seeking to vary a contract must exercise caution as the authority may not extend to the variation of ...

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    • Folder icon If required - Disposition of taxable Canadian property by non-residents
      • Item icon Request by a Non-Resident of Canada for a Certificate of Compliance Related to the Disposition of Taxable Canadian Property
  • Folder icon D. Claims and disputes
    • Item icon Right to rescind and consequences of rescission
      A purchaser may rescind the contract by serving notice during any conditional or rescission periods stipulated in the purchase contract or at law, for example, when purchasing a new residential condominium unit from a builder. The purchaser is entitled to a refund of the deposit paid.

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    • Item icon Claims
      When a purchaser breaches the purchase contract, the vendor may institute proceedings to recover from the purchaser the shortfall from a resale. The deposit may be forfeited without proof of damages.

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    • Item icon Deterioration
      A Residential Purchase Contract is an executory contract, meaning that the parties will complete the contract some time after the agreement is made. This is contrasted with an agreement of sale of an ice cream, which is completed when the agreement is made. This time delay creates the possibility ...

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    • Item icon Breach of purchase contract
      An innocent party could claim expectation damages if they did not receive what they expected from the contract. Expectation damages must be reasonably foreseeable, unable to be mitigated by the innocent party, and certain. Mitigation needs to be reasonable, for example, a vendor is usually required ...

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    • Item icon Notices
      Ownership of land requires the owner to have a relationship with many other people and organizations in relation to the land, for instance, neighbours, and local and other authorities. These relationships may result in these third parties taking a particular interest in the property and may even ...

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    • Item icon Letter to other side with notice of waiver or satisfaction of condition
    • Item icon Letter to other side giving notice of termination
    • Item icon Mutual termination agreement
  • Folder icon E. Through to closing
    • Item icon Closing documents
      Vendor’s documents The following documents are provided by the vendor at closing:

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    • Item icon Adjustments
      The usual adjustments in residential transactions are made for property taxes and, in the case of condominium properties, monthly common expenses. Sometimes, there will be adjustments for tenant rent, oil, and flat-rate water. The vendor pays for these costs up to and including completion day, and ...

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    • Item icon Statement of Adjustments
    • Item icon Letter to client enclosing statement of adjustments
    • Item icon Vendor's undertaking to readjust
    • Item icon Transfer of Land
    • Item icon Certificate of Acknowledgement By Spouse
    • Item icon Consent of Spouse
    • Item icon Dower Affidavit
    • Item icon Release of Dower Rights
    • Item icon Affidavit in Support of Dower Release
    • Item icon Release of Dower Rights by video conferencing – Service Alberta
    • Item icon Affidavit of Executor or Administrator – Form G – Service Alberta
    • Item icon Consent of Surviving Spouse – Form H – Service Alberta
    • Item icon Mortgage
    • Item icon Affidavit of Attestation of an Instrument
    • Folder icon If required - Attestation by corporation
      • Item icon Affidavit Verifying Corporate Signing Authority
    • Item icon Land titles – Service Alberta
    • Item icon Vendor's document acknowledgement and direction
    • Item icon Sale closing declaration and undertaking
    • Item icon Direction by vendor regarding proceeds of sale
    • Item icon Acknowledgement by vendor regarding utilities
    • Item icon Letter to client enclosing closing documents for signing
    • Item icon Letter to other side's lawyer confirming extension of closing date
    • Folder icon If required - Statutory declarations
      • Item icon Statutory declaration
      • Item icon Clause - Statutory declaration by vendor - Registry land
      • Item icon Clause - Statutory declaration - Writ of execution
      • Item icon Clause - Statutory declaration - Ownership, survey, and GST
      • Item icon Clause - Statutory declaration - Directors declaration of possession by a corporation
    • Folder icon If required - Undertakings and indemnities
      • Item icon Undertaking by vendor's lawyer - Discharging charges
      • Item icon Undertaking by purchaser's lawyer - Section 116 certificate
      • Item icon Purchaser's certificate and indemnity - Goods and services tax
      • Item icon Letter to other side's lawyer enclosing undertakings
    • Folder icon Closing
      • Item icon Closing process
        Pre-closing inspection Usually, the purchase contract includes a provision allowing the purchaser a limited number of visits to the property before closing to arrange for bank appraisals, take measurements, or generally check that the property is in the same condition as at the time of the ...

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      • Item icon Closing instructions - Sale
      • Item icon Direction for payment of funds and undertaking
      • Item icon Escrow closings
        All e-registration closings are escrow closings. However, when the purchaser is moving on the completion day, an extension of time does not solve the problem, as against an escrow agreement, which allows the purchaser to occupy the property. A written escrow agreement is preferable to a verbal one. ...

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      • Item icon Delayed closing escrow agreement
      • Item icon Holdback agreement
      • Item icon Letter to purchaser's lawyer enclosing closing package
      • Item icon Land titles – Service Alberta
    • Item icon Completion and merger
      The common law doctrine of merger grew out of the principle that when a lesser estate was vested in the same person as a greater estate, the lesser estate merged into the greater estate and was extinguished. A common example of this principle is where the dominant and servient tenements in an ...

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    • Item icon Post-closing and reporting
      The vendor’s lawyer must disburse the sale proceeds and confirm satisfaction of all trust conditions imposed by the purchaser’s lawyer, including receipt of a satisfactory closing title search and delivery of confirmation to the purchaser’s lawyer, effect the discharge of all non-permitted ...

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    • Folder icon Post closing letters
      • Item icon Acknowledgement - Receipt of closing funds
      • Item icon Letter to real estate broker after closing to account for deposit
      • Item icon Letter to purchaser's lawyer confirming discharge of mortgage registered
      • Item icon Letter to bank enclosing cheque deposit
      • Item icon Letter to lender following up discharge of mortgage
      • Item icon Letter to lender enclosing mortgage payout
      • Item icon Letter to municipal office advising change of ownership
      • Item icon Letter to tenant with notification of sale
  • Folder icon F. Finalizing the matter
    • Item icon Letter to client finalizing the matter
    • Item icon Invoice recital - Sale of real estate
    • Item icon Closing the file
    • Item icon File closing checklist
  • Item icon Comments and suggestions for By Lawyers

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