A contract is a legally binding agreement between two or more parties and describes the rights and obligations of the parties to the contract.
Where a contract is properly drafted and signed by the parties to the contract, where the terms are clear, and the contract is not for an illegal purpose, it’s likely that the contract enforceable. Only the parties to a contract can sue, or be sued, under the terms of that contract.
Before you sign a contract
- Never sign a contract if you don’t understand it.
- Before you sign a contract, consult your REALTOR®, your Realtor’s managing broker, and/or your lawyer for advice.
Generally, Canadian courts expect that if you have signed a contract, you’ve agreed to it and you will be bound by its terms. You may not be protected if you claim that you didn’t understand what you were signing. Always ensure that you under¬stand a contract before you sign it.
Standard form contracts
The real estate contracts used by Realtors are standard form contracts. The wording and terms of these contracts have been prepared by lawyers and have been tested in Canadian courts.
Cancelling a contract
If you’ve signed a standard form Multiple Listing Contract, Exclusive Listing Contract, or Exclusive Buyer Agency Contract and you wish to cancel the contract early, you can only do so if the other party to the contract (your Realtor’s company) agrees. REBGV can’t force its members to cancel listing or buyer agency contracts early.
If you’ve signed a contract to buy or sell a prop¬erty (contract of purchase and sale) and wish to cancel it, you should seek legal advice immediately. Realtors aren’t parties to these contracts and can’t cancel them unless the contracting parties agree, in writing, to do so.
What happens if a buyer or seller doesn’t fulfil the terms of a contract?
Even though your Realtor may have drafted the contract to sell or buy a property for you, they’re not a party to that contract. A Realtor can’t force their client to fulfil the terms of a contract with the buyer or seller. If the buyer or seller doesn’t fulfil the commitments they’ve made in the contract, you may have legal recourse and should seek legal advice. If you don’t have a lawyer, you can contact the Lawyer Referral Service: 604-687-3221. If you have difficulty understanding English, you can contact organizations like S.U.C.C.E.S.S. 604-684-1628 for assistance.
Here are examples of common issues for which the buyer or seller (not the Realtor) is responsible:
- Buyer doesn’t close the sale.
- Buyer doesn’t remove the contract’s subject clauses.
- Seller doesn’t close the sale.
- Seller doesn’t remove the contract’s subject clauses.
- Property is left untidy or dirty by the seller.
- Seller has removed items that were included in the contract.
- Transaction doesn’t close on time.
- Appliances break down or a previously unknown property defect reveals itself after closing.
Your Realtor and their brokerage may be able to help resolve this type of complaint. Typically your Realtor will contact the other party’s Realtor or brokerage and let them know about your concerns and ask them for assistance. As noted, your Realtor can’t force the other party to do what they said they would do in the contract. (For this, you need the as¬sistance of a lawyer or the courts).
If you have a monetary claim of less than $25,000 you don’t need a lawyer to represent you in court – although legal representation is recommended. The small claims court of BC is where you can make your case before a judge. More information about the small claims court of BC.