9. Review of documents by the buyer
The buyer must be able to review any document concerning the immovable. At the time of drafting the promise to purchase, he should already have obtained and reviewed with his broker certain available documents such as the description sheet and the Declarations by the seller of the immovable form. If available, the certificate of location must also be reviewed before the promise to purchase is drawn up.
A review of these initial documents will help determine what other documents should be requested from the seller and for which review and verification to the satisfaction of the buyer will be a condition of the promise to purchase.
In addition to the documents ideally reviewed prior to the drafting of the promise to purchase, additional documents may be requested by the buyer. The need for the buyer to conduct such a review varies depending on the context of the transaction, the type of immovable and other circumstances. When required – which is not always the case – the broker must make the promise to purchase conditional upon the review and verification of clearly listed documents, to the satisfaction of the buyer.
This will be the case, in particular, for the documents mentioned in the form Declarations by the seller of the immovable supporting the declarations made therein. These could be invoices for the installation of equipment or appliances, plans and permits for major work, previous inspection or expert reports, information on zoning, leases and notices, or information on the expenses and maintenance of the immovable, revenues, etc. The buyer may request other documents that his broker, another broker or even the seller does not have in their possession. The provision does not refer only to the documents in the seller’s possession, but to any document that may be requested by the buyer. These details must be entered in clause 9.1, specifying in the space provided the time frame within which the documents must be provided. This is generally a period of only a few days.
If the buyer is not represented by a broker, the seller’s broker can easily provide the buyer with a copy of any additional relevant documents that the seller has already provided to him before the promise to purchase was drawn up.
If the buyer and the seller are both represented, the buyer’s broker must check to see whether the seller’s broker has uploaded these documents to the information listing service he uses. If not, the buyer’s broker must endeavour to obtain them prior to drafting the promise to purchase, and then list in clause 9.1 any documents that have not yet been reviewed.
If the immovable is sold directly by the owner, without a real estate broker, the buyer’s broker must advise his client to ask for a detailed description of the immovable, the declarations by the seller of the immovable, as well as tax bills (municipal and school taxes), energy bills, etc.
Results of the document review and verification
If the review of the documents received is to the buyer’s satisfaction, he may notify the seller and declare the condition fulfilled. He can also let the time period run out, at which time the condition will be extinguished.
The time frame for the buyer to notify the seller that he is rendering his promise to purchase null and void is twofold: a first period is allotted to the seller to deliver the documents, and a second period of seven additional days for the buyer, in turn, to notify the seller. If the first period is, say, five days, the total period will be 12 days.
It is the broker’s responsibility to facilitate this step by calculating the time frame, explaining it to the parties and following up on the execution of the steps. This minimizes irritants and potentially costly errors.
For more information: Obtainment of the certificate of location: What clause should be used in the promise to purchase? and Accepted transaction proposal: The importance of obtaining proof of receipt when following up on conditions
