A Guide to Buying Real Estate in Alberta, Part 1: Put it in Writing

Over the next couple of weeks we’re going to publish a series of articles that will add up to a simple guide to buying and selling real estate in Alberta. This is not an exhaustive guide, or even a detailed guide, but it does cover some of the basics that home owners and potential home owners should be aware of. In part 1, we discuss the concept that everything must be in writing…

If you're going to buy or sell real estate in Alberta one simple rule is that everything must be in writing. The Statute of Frauds requires that any contract relating to land be in writing. For example, in business you can make an oral contract or shake on it, and that "contract" could be held up in a court of law, but if it relates to land it must be in writing.

That brings us to the purchase contract that the buyer and seller must have whenever land transfers hands. In this series we will repeatedly reference the purchase contract developed by the Alberta Real Estate Association (AREA) which includes mandated content from the Real Estate Council of Alberta (RECA), which is used by members of AREA (REALTORS). The contract is designed to be neutral - fair to both the buyer and the seller.   

Neutrality doesn’t necessarily that it is completely fair.  In my mind completely fair would mean every single advantage is negotiated by the parties, or there is complete neutrality.  For example, the contract I use refers to the seller providing a Real Property Report with evidence of municipal compliance within a certain time frame.  If it was completely neutral the parties would share the cost of the RPR.  If it was to the seller’s advantage they wouldn’t have to provide an RPR or provide any warranties on it whatsoever.  In order for commerce to be effective standardizations can be required so that things can proceed past grid locked negotiations. 

It is a common misconception that if the seller is offering to include something with the sale of the home on the listing (ie. appliances), then it is automatically included. However, if the appliances are not written into the purchase contract, the seller is under no obligation to include the appliances in the sale, as they are not securely attached to the property (discussed in a later article). So, when you want to buy a home and there is something you want included in the sale, be sure to take note of it.

Recently we were working with buyers from out of town, who were looking at condos downtown. They made an offer on a condo that had been substantially renovated. The sellers had indicated all kinds of things were included in the sale, such as audio visual equipment and furniture. When we received a counter offer from the sellers they removed everything from the contract including (surprisingly enough): light fixtures, plumbing fixtures, shelves…if you can name it, it was excluded. Basically, what the sellers were offering wasn't even close the same condo the buyers had viewed. So we walked away. This is a fairly typical bait and switch tactic but on a much larger scale than normal.

Ok, back to "everything in writing." That means everything! If you want the carpets cleaned before possession, put it in writing. If you want a NEW Real Property Report, put it in writing. If you expect the appliances to be in “normal” working order, put it in writing or if you want them removed….I think you get the idea. An experienced REALTOR will have had countless experiences relating to these different clauses, and the different situations that may apply.  This is not intended to be detailed guide but to raise awareness if you might be thinking of entering into in agreement.

Even though contracts are intended to be fair, the end result is based on what is negotiated and what is written into the contract. It is up to you figure out the nuances and how they can affect you.  And remember….put it in writing!