Amending a promise to purchase after acceptance
Once the promise to purchase has been accepted, the buyer and the seller may agree to amend the terms of their agreement. This can occur during the period of fulfilment of the various conditions set out in the agreement or even later, when all the conditions have been fulfilled and special circumstances require a review of the agreement prior to the signing of the deed of sale (example: following receipt of the inspection report, the buyer requests and the seller agrees to a more thorough inspection).
Another common example is a reduction in the selling price, negotiated after an inspection report reveals factors that could significantly affect the value of the property, the revenue therefrom or the use thereof. This price reduction could also be accompanied by an exclusion of the warranty of quality for the specific elements outlined in the report.
Other examples of amendments include an undertaking by the seller to carry out certain work at his own expense or the withholding of a sum by the notary to guarantee the execution of the work, the starting up of the swimming pool which, as the warm season approaches, can become a source of concern and which the parties agree to clarify before the signing of the deed of sale.
The Amendments form
The Amendments form must be used to amend a brokerage contract or a promise to purchase concerning a residential immovable. It must also be used to amend any other document that forms an integral part of such documents, including annexes such as the Declarations by the seller of the immovable form. Note that it can also be used, although it is not mandatory, to modify the terms of a commercial promise to purchase.
M1. Reference to principal form
In clause M1, the broker must identify the form that is being amended by checking whether it is a brokerage contract or a promise to purchase and entering the reference number. If it is another type of document, the name of the document and its reference number, if applicable, must be entered. To make sure there is a perfect match, the full address of the property concerned should also be entered.
M2. Amendments to the brokerage contract
Clause M2. Amendments to the brokerage contract must be completed to change the expiration date or the sale price indicated in the brokerage contract.
If both a brokerage contract and a promise to purchase need to be amended, two Amendments forms must be completed since these are different agreements between different people and therefore subject to different amendments.
M3. Extension of acceptance period
This clause refers to the acceptance period set out in the promise to purchase, i.e. the period of firm commitment by the buyer within which the seller must accept the proposal. Such an amendment may be necessary when the initial deadline is short and the promise to purchase cannot be presented to the seller in time. In this case, the time period must be extended using this form, by entering the number of the clause of the promise to purchase that is being amended, i.e. clause 14. Conditions of acceptance in the case of the mandatory promise to purchase form for an immovable containing less than 5 dwellings excluding co-ownership, specifying the time and date until which the deadline is extended. Once the Amendments form has been signed by the buyer, it must be presented to the seller at the same time as the promise to purchase. The seller will only need to sign first the Amendments form if he accepts the extension, and then the Promise to purchase form if he accepts the offer. This is the only amendment that can be proposed using this form before acceptance of the promise to purchase.
M4. Extension of time period (after acceptance)
Clause M4 can be used to amend any time period specified in the promise to purchase once it has been accepted (e.g., time period for completing of the inspection, providing confirmation of financing or receiving documents). To extend the period, the broker must enter the number of the clause in the promise to purchase that is being amended and specify the date until which the period is extended. In general, the time periods in the promise to purchase are indicated in numbers of days, whereas the amendment requires a new date to be entered. The broker must count the days on the calendar and identify this date, remembering that day “one” of a deadline is always the day following acceptance of the promise to purchase.
M5. Other amendments
Clause M5 of the form can be used to amend any clause in a brokerage contract, promise to purchase or annex. The broker must enter the number of the clause or paragraph being amended and describe the change. If it is a new condition, it is recommended to use a standard clause.
As many changes as necessary may be entered. If there is insufficient space, another Amendments form may be used. The broker can also indicate in clause M5 that the promise to purchase is being amended by the addition of an Annex G – General bearing this number, in which all amendments will be recorded.
M6. Other conditions
Clause M6 is a reminder that all other conditions of the form identified in clause M1 that have not been amended remain unchanged. Although the wording and context of use is different, this provision is similar to the one found in clause P2.6 of the mandatory Counter-proposal form.
M7. Signatures
The form must be signed by all persons who have signed the promise to purchase. They acknowledge that they have read, understood and agreed to the form.
The handling of signatures differs, however, depending on whether the form is used to amend a brokerage contract or a promise to purchase. For example, in the case of amendments to a brokerage contract, the seller’s spouse must also sign if they intervened in the contract. The Amendments form has a space for a witness to sign, thus attesting that the signatory or signatories have indeed signed. This possible witness signature should be present when the form is used to amend a promise to purchase. Unlike in the brokerage contract, the signatories acknowledge having received a copy of the form. The notion of “copy” here again applies to the situation where the form is used to amend a promise to purchase. When amendments are made to a brokerage contract, the broker must provide the seller with a duplicate of the document, with an original signature as is the case for the brokerage contract itself, in order for the changes to have full effect. The terms and conditions applicable to the brokerage contract are also applicable to the amendments, and the rules that apply to a brokerage contract for a chiefly residential immovable containing less than five dwellings require the provision of a duplicate.
In addition, if the seller’s spouse has intervened in the promise to purchase, they must also intervene in the Amendments form.
