News Bulletin - October 14, 2020
Updated Back-Up Offer Clause
By-law Part Two - Commission Administration Revised
Updated Back-Up Offer Clause
The back-up offer clause in the NSREC clause book has been updated. The purpose of the clause book is to assist licensees in determining the appropriate language for conditions that are needed in an agreement.
What is a Back-Up Offer?
A back-up offer is when a buyer submits an offer on a property with the understanding the seller already has an accepted agreement of purchase and sale in place. If the back-up offer is accepted by the seller, it forms an agreement (back-up agreement), but does not come into effect until the first accepted agreement is terminated.
When preparing a back-up offer for a buyer client, the following clause is recommended:
It is agreed and understood by the Seller and the Buyer that this Agreement shall be a backup to an Agreement already in place on the property. This Agreement shall only become effective if the first Agreement is terminated on or before [DATE], or such other date as amended by the Seller and the first Buyer, which shall be no later than [DATE], failing which, the Seller will provide written notice to the Buyer that this Agreement is deemed null and void and the Buyer’s deposit, if applicable, will be returned without interest or penalty.
Complete the first [DATE] with the last condition date (unrelated to title) from the first agreement. Complete the second [DATE] with the last date the back-up buyer is willing to be bound by the back-up agreement. If the first agreement is still in effect, I.e. the condition dates were extended in the first agreement, the second [DATE] accommodates the extensions to the first agreement and the back-up agreement doesn’t have to be amended. If the first agreement is still in place by the second [DATE], the seller will provide written notice of the termination of the back-up agreement and if applicable, the buyer’s deposit will be returned.
It is important to explain this clause to your client and to advise them to seek legal advice for further information.
By-law Part Two—Commission Administration Revised
The Board of Directors struck a By-law Task Force to review and assess the adequacy of the current By-law. The By-law Task Force is charged with preparing a report for the Board of Directors with recommended changes to ensure the By-laws are current and consistent with the Commission’s mandate.
The By-law Task Force presented their report and revised By-law of Part Two—Commission Administration at the September 2020 Board meeting. The Board approved their report and the revised By-law.
To view the updated By-law, click HERE.
Other By-law Changes
The Board of Directors passed two additional By-law revisions on licensing procedures in Part Three—Licensing:
1. By-law 321(e)—Exam registration now requires all students to complete the licensing course. Previously the by-law pertained to only online students.
2. By-law 316(a)(iii)—To comply with the Canada Free Trade Act (CFTA) and the direction of the Fair Registration Practices Office, the sworn affidavit requirement for brokers who license here from other provinces to meet our experience requirement was repealed.