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Updates to satisfying buyer's conditions changes, effective January 3rd, 2022. Click here for more information.

 

 

Conduct & Required Trade Practices

Electronic Signatures Require Time Stamps

Electronic Signatures Require Time Stamps

May 18, 2022: Reminder to licensees that when submitting an offer to purchase or sell real estate, all signatures require the date of acceptance per section 30(2) of the Real Estate Trading Act. If using an electronic signature platform that does not reflect the date of acceptance, it is required to maintain a certificate supporting the date of accepting/signing the document.

Submitting Offers on Multiple Properties

Submitting Offers on Multiple Properties

March 15, 2022: The Commission has received reports of licensees representing buyer clients who will submit offers on multiple properties at the same time, knowing that the buyer does not intend to buy multiple properties. This strategy is being used in the current real estate market in an attempt to secure an accepted offer on a property, and if more than one of their offers are accepted, they choose one property to proceed with purchasing, and terminate the other agreements using out clauses. A licensee that engages in this practice is in violation of the Act and the By-law, specifically sections: RETA section 22(1) by-law 702(2) by-law 702(34) by-law 702(35) When submitting an offer to a seller, the buyer is representing that they will enter into an agreement in good faith if their offer is accepted. A licensee submitting multiple offers on behalf of a client (unless their client is willing to purchase multiple properties) knows that at least some of the offers being made are not being made in good faith as there is no intention to purchase all of the properties. The fact that at the time the offers are submitted it is unclear which of the multiple offers is not made in good faith does not change the licensee’s knowledge that the buyer does not intend to be bound by one or more of the offers. If a buyer wants to use this strategy, you must advise them that this is not a lawful instruction and violates the Act and the By-law. (March 15, 2022)

What is Considered a Bedroom?

What is Considered a Bedroom?

February 15, 2022: The Commission does not have a definition of a bedroom. Seller's licensees must confirm the building codes for bedrooms with the respective municipality when listing properties. Houses with bedrooms that are not to code can be advertised as bedrooms; however, the advertisements must clearly indicate the bedrooms do not comply with building codes and state why, for example, window too small to allow egress. Buyer’s licensees also have an obligation to discover facts when representing clients. If a bedroom appears to have a window that does not pass code, they are to bring it to their attention of their client and recommend they confirm with the municipality.

Drone Operating Requirements

Drone Operating Requirements

February 15, 2022: The Canadian Armed Forces base in Greenwood has contacted the Commission with an educational reminder for licensees who may use drones to take videos or photos of properties. There are potential safety concerns when flying in or near aircraft control zones without permission. Drone apps or websites may only use estimates and default distances, therefore drone users should be responsible and check official sources to determine what laws or regulations might apply to their drone flight. Most airports have a default 3 nautical mile area where drones are not permitted, except by permission. The Greenwood control zone (surface to 5000 feet above ground level) extends to 7 nautical miles (approximately 13 km) from the centre of the airfield. Any drone operator wanting to operate their drone in this area needs to get prior permission from 14 Wing Operations (902-765-1494 ext. 5457), and be in contact with the Air Traffic Control tower while doing their flight.

Multiple (Competing) Offer Situations & Confidentiality

Multiple (Competing) Offer Situations & Confidentiality

February 15, 2022:The handling of multiple offers is defined in by-law 702, Article 12: An industry member shall present all written offers and counter-offers as objectively and quickly as possible. This must be done within the specified timeframes or a written extension must be obtained. An industry member shall not withhold or delay the presentation of an offer without the express written consent of the client. When there are multiple offers, an industry member acting on behalf of the seller must disclose to all potential buyers or their agents that there are multiple offers, unless otherwise instructed by the seller in writing, but must not disclose to any other person the specific terms and conditions of other offers. Whether to disclose a multiple-offer situation to respective buyers is entirely up to the seller. The decision on whether to disclose is documented in clause 8 of the Seller Designated Brokerage Agreement or clause 6 of the Seller Brokerage Agreement. The seller's representative must follow the seller’s lawful instructions. Should a seller change their mind regarding whether to disclose that there are multiple offers, the Brokerage Agreement must be amended accordingly. In summary, if you are the seller's representative and have received multiple offers and have instruction to disclose to competing buyers:
  • Inform the seller immediately.
  • Provide all offers and recommend the seller review every offer prior to making a decision.
  • Do not disclose specific terms or conditions of the offers, either directly or implicitly, to any of the competing buyers or any other persons.
  • Disclosing specific terms or conditions of multiple offers, either directly or implicitly, to respective competing buyers or any other persons is a violation of Commission by-law 702, Article 12.
For example, do not disclose:
  • Price
  • Closing date
  • “You are in the top three”
  • “Other offers are higher”
  • “Do you want to increase?”
These are all violations of by-law 702, Article 12.

January 3rd, 2022 Updates to Satisfying Buyer's Conditions

January 3rd, 2022 Updates to Satisfying Buyer's Conditions

December 22, 2021: As previously announced by the Commission, effective January 3rd, 2022, significant changes are being made to the process of satisfying buyer's conditions in the Agreement of Purchase and Sale. Per the changed clauses in the Agreement of Purchase and Sale, the new process will require a buyer to provide the seller or seller's agent with written confirmation (Form 408) that they have satisfied their buyer's conditions before the condition deadline. This means the buyer’s agent must confirm that their buyer is satisfied with the applicable buyer's conditions and if satisfied, complete Form 408(s), have their buyer sign it, and relay it to the seller or seller’s agent before the condition deadline(s). If Form 408(s) is not relayed to the seller or seller’s agent by the condition deadline(s), the agreement is deemed terminated. To view the video about the change's to buyer's conditions, click HERE. To view all the information on the change's to buyer's conditions, including an updated Q&A, click HERE. To view all the forms changes, click HERE. Key things to remember:
  • January 3rd, 2022 is when the new process goes into effect and revised forms become mandatory.
  • Buyers still have their list of conditions to satisfy and their deadline.
  • There are specific conditions that are impacted by this process.
  • This new form is required to waive the buyer’s conditions from the Agreement of Purchase and Sale. Failure to provide written notice of satisfaction (Form 408: Buyer Waiver of Conditions) now means the agreement shall be deemed terminated.
  • Once the buyer is satisfied with their conditions, they must complete and sign Form 408: Buyer Waiver of Conditions, and provide it to the seller or seller’s agent on or before the condition deadline.
  • The buyer has the ability to propose an amendment without the seller being able to trigger a termination over notice of dissatisfaction.
  • The buyer still has the ability to terminate the agreement prior to the specific buyer’s condition deadline, however, the seller does not.
  • Remember: No news means you lose!
  • The clauses on lawyer review, title investigation and the estoppel certificate in the condo schedule have not changed, and still use the process of notice of dissatisfaction/objection.
  • As a reminder, licensees are to ensure their client's lawyer is provided with all necessary real estate transaction documents including any and all competed and signed Form 408s.

Escalation Clauses Do Not Comply With the Act

Escalation Clauses Do Not Comply With the Act

July 2, 2021: This is a reminder to the industry that the use of escalation clauses in an Agreement of Purchase and Sale (APS) violates Section 30 (d) of the Real Estate Trading Act, therefore licensees cannot use them when preparing offers. An escalation clause is a formula used in place of or in addition to an actual purchase price, i.e. $X amount over the highest price offered in competing APSs. Recording a purchase price in an APS and then adding an escalation clause in an addendum or schedule does not comply.

Reviewing of Offers (Including Pre-Emptive Offers)

Reviewing of Offers (Including Pre-Emptive Offers)

May 18, 2021: When listing a property, a seller may instruct their licensee to require all offers to be left open until a set date. The seller can specify that those offers not be delivered until a set date with the intention of reviewing all offers at once or that offers can be delivered at any time, but must be left open until that set date. Record the seller’s instructions in the Seller Brokerage Agreement/ Seller Designated Brokerage Agreement. A pre-emptive offer (also known as “bully offer”) is an offer that expires prior to the date specified by the seller. Regardless of the date set by the seller, the seller can choose to review the pre-emptive offer and accept, reject, counter, or not respond. Likewise, the seller can, at any time, accept, reject, or counter any other offer received. The seller’s licensee is to ensure their client’s interests are protected and to advise them of the possible implications when considering acceptance of any offer prior to the date set by the seller. If there is a lot of interest, it may be best for the seller to wait until that set date. If a seller receives a pre-emptive offer, they are not obligated to wait to have showings and additional offers. The seller can decide how and when they want to receive offers. If a seller wants to review a pre-emptive offer, they can direct their licensee to amend the Brokerage Agreement to include pre-emptive offers. There is nothing restricting the buyer’s licensee from submitting a pre-emptive offer on behalf of their client; however the buyer’s licensee is to ensure their client’s interests are protected. Buyers must be aware that a seller can decide to ignore any offer, including a pre-emptive offer, that is submitted for their property. Further, a buyer who submits a pre-emptive offer may provoke a negative reaction from the seller because it does not follow the seller's offer instructions. The Commission By-law outlines the obligations that licensees are required to fulfill as part of their agency relationship with either a buyer or a seller, including: promoting the interests of their client, obeying all lawful instructions, assisting in negotiating favourable terms and conditions, and presenting all offers or counter-offers in a timely manner.

Advertising Sold Prices Reminder

Advertising Sold Prices Reminder

January 8, 2021: Advertising as “sold” by buyer's brokerage: If the transaction hasn’t closed, and the buyer's brokerage wants to advertise a property as “sold” (all conditions met unrelated to title), the buyer brokerage's must obtain written permission from both the buyer and seller/seller’s brokerage in order to advertise. After the transaction has closed, the buyer's broker only needs the buyer's written permission to advertise the sale. The advertisement must clearly state the brokerage represented the buyer only in the transaction. This written permission must advise what they are advertising and an expiry date. Advertising purchase price by buyer's or seller's brokerage: In order to advertise purchase price information, you need written permission from both parties to an agreement of purchase and sale (buyer(s) and seller(s)). This permission must advise what they are advertising and an expiry date. Note, advertising a purchase price includes the practice of stating the property sold for $X amount over list or asking price.

'Coming Soon' Policy Reminder

'Coming Soon' Policy Reminder

August 14, 2020: The use of 'Coming Soon' advertisements is for advertising properties that have not been listed. Next time you take to advertising on social media to highlight an anticipated future listing, have your broker review the ad and take a moment to ensure what you are displaying meets the Commission's Board of Director's approved policy setting minimum standards for 'Coming Soon' advertising and promotions. View the full policy HERE.

Striking Clauses

Striking Clauses

May 14, 2020: When striking a clause, the wording of the clause must remain legible. You can strike a clause by drawing a line through the text or by typing “N/A” or “Not Applicable”. After striking the clause, the clause must be initialled by all parties to the agreement. For more information on striking clauses, see The Dos and Don’ts of Struck Clauses. This requirement is documented on page 21 of the Audit Policy.

The Nova Scotia Real Estate
Commission
is the regulator of the
Nova Scotia real estate industry.

Contact Us

Nova Scotia Real Estate Commission

601-1595 Bedford Highway
Bedford, NS
B4A 3Y4

p: 1.902.468.3511 or
1.800.390.1015

f:  1.902.468.1016 or
1.800.390.1016

e: For licensing information
licensing@nsrec.ns.ca
For complaints
compliance@nsrec.ns.ca