ALBERTA REAL ESTATE PRACTICE MANUAL TABLE OF CONTENTS CHAPTER 1 LISTING AGREEMENTS 1 Agency relationships in residential real estate .......................................................................... 1-2 1.1 Introduction .................................................................................................................. 1-2 1.2 Designated agency ....................................................................................................... 1-2 1.3 Transaction and common law brokerages ................................................................. 1-2 1.4 Disclosure of an agency relationship .......................................................................... 1-4 1.5 Agency representation in real estate .......................................................................... 1-5 2 Statutory requirements ............................................................................................................... 1-6 2.1 The Real Estate Act ...................................................................................................... 1-6 2.2 The Real Estate Act Rules ........................................................................................... 1-7 2.3 Statute of Frauds ......................................................................................................... 1-7 2.4 Common law ................................................................................................................. 1-7 3 Types of listings ........................................................................................................................... 1-8 3.1 General or open listing ................................................................................................. 1-8 3.2 Exclusive listing ............................................................................................................ 1-8 3.3 Pocket listing ................................................................................................................ 1-8 3.4 Multiple listing .............................................................................................................. 1-8 4 Key terms – exclusive seller representation agreement .......................................................... 1-9 4.1 Seller and property descriptions ................................................................................. 1-9 4.2 Duration of the agreement .......................................................................................... 1-9 4.3 Commission ................................................................................................................ 1-10 4.4 Security for fees ......................................................................................................... 1-11 4.5 Payment of commission ............................................................................................ 1-11 4.6 Execution .................................................................................................................... 1-11 5 Appendix list ............................................................................................................................... 1-11 CHAPTER 2 OFFERS TO PURCHASE, OPTIONS, AND RIGHTS OF FIRST REFUSAL 1 Offers to purchase and interim agreements .............................................................................. 2-2 1.1 Parties ........................................................................................................................... 2-2 1.2 Property ......................................................................................................................... 2-3 1.3 Transaction ................................................................................................................... 2-4 LESA 2018 ALBERTA REAL ESTATE PRACTICE MANUAL 1.4 Deposits ........................................................................................................................ 2-6 1.5 Closing ........................................................................................................................... 2-6 1.6 Insurance .................................................................................................................... 2-10 1.7 Warranties and representations ................................................................................ 2-10 1.8 Additional terms .......................................................................................................... 2-12 1.9 Conditions ................................................................................................................... 2-12 1.10 Remedies .................................................................................................................... 2-13 1.11 Dower Act requirements ............................................................................................. 2-14 1.12 Notice and authorization ............................................................................................ 2-14 1.13 Offer ............................................................................................................................ 2-15 1.14 Acceptance ................................................................................................................. 2-15 2 Options ....................................................................................................................................... 2-15 2.1 Introduction ................................................................................................................ 2-15 2.2 Commentary ............................................................................................................... 2-16 3 Rights of first refusal ................................................................................................................. 2-19 3.1 Introduction ................................................................................................................ 2-19 3.2 Commentary ............................................................................................................... 2-20 4 Appendix list ............................................................................................................................... 2-22 CHAPTER 3 PRE-CLOSING 1 Introduction .................................................................................................................................. 3-2 1.1 Using checklists............................................................................................................ 3-2 2 Closing documents ...................................................................................................................... 3-3 3 Acting on a residential sale ......................................................................................................... 3-3 3.1 Real estate commission .............................................................................................. 3-3 3.2 Retainer agreement ..................................................................................................... 3-4 3.3 State of title .................................................................................................................. 3-4 3.4 Land use compliance ................................................................................................... 3-7 3.5 Property taxes ............................................................................................................... 3-7 3.6 Utilities .......................................................................................................................... 3-7 3.7 Mortgage assumption statement ................................................................................ 3-8 3.8 Mortgage pay-out statement ....................................................................................... 3-9 3.9 Preparation of a statement of sale and adjustments ................................................ 3-9 LESA 2018 ALBERTA REAL ESTATE PRACTICE MANUAL 3.10 Unpaid seller’s lien caveat ........................................................................................ 3-10 3.11 Tenancies ................................................................................................................... 3-10 3.12 Closing procedure ...................................................................................................... 3-10 4 Acting on a residential purchase .............................................................................................. 3-11 4.1 Review of transaction ................................................................................................ 3-11 4.2 Other searches ........................................................................................................... 3-11 4.3 Registration of a buyer’s caveat ................................................................................ 3-11 4.4 Retainer letter ............................................................................................................ 3-11 5 Special considerations .............................................................................................................. 3-13 5.1 Duplexes ..................................................................................................................... 3-13 5.2 Rental properties........................................................................................................ 3-14 5.3 Non-fixed structures (movables) ..............................................................................