Policy Revision: Adding a Second Buyer to an Agreement of Purchase and Sale
January 19, 2016
We published an article in January 2016 clarifying the procedure to add new buyers to an accepted Agreement of Purchase and Sale (APS). As noted in the article, the procedures were initially developed using a legal opinion provided to the Commission. We recently discovered that this subject was being covered in the 2015/16 mandatory course “20 Timely Topics for Salespeople” using slightly different variations of the policy by the respective course instructors. As a result, compliance staff met with the instructors to re-examine the policy to ensure consistency between the course instructors and the Commission.
We determined that the policy was still in need of a minor revision. We work hard to ensure such procedures are thoroughly analysed and correct to keep such revisions to an absolute minimum and appreciate licensees' cooperation and understanding in getting this right. Please note that the Commission’s inspectors and investigator view the previously published and updated policy correct in transaction files for this time period.
The most significant revision is that the final step is now optional. While it is not contractually required, it is a recommended risk management practice.
STEP ONE: If not already obtained, any additional documents required for buyers such as: Working with the Real Estate Industry form, Buyer (Designated) Brokerage Agreement, Customer Status Acknowledgements, etc. would need to be completed with the new buyer.
STEP TWO: Complete an amendment to the APS, adding the new buyer. The following clause for the amendment clearly outlines the addition of the new buyer: “It is agreed and understood that [NAME OF NEW BUYER] is added to this Agreement as a [BUYER]. By signing this amendment [NAME OF NEW BUYER] confirms acceptance of all terms and conditions of the Agreement.”
STEP THREE: The added buyer and all of the original parties must all sign the amendment to the APS consenting to the additional buyer being added.
STEP FOUR: (Optional) Have the added buyer initial and date the bottom of each page of a copy of the original APS, the PDS, the Schedule of Leased/ Rented Equipment and any other relevant real estate documents, as evidence that the new buyer clearly read and understood all terms.