Contract Assignment Requirements FAQ’s

• I am a real estate professional working with a seller. I just received an offer from a buyer’s real estate professional that alters or strikes out a Standard Assignment term. The buyer’s real estate professional has not provided me with a Notice Regarding Assignment Terms form. What do I do?

  First, ask the buyer’s real estate professional to provide the form. If they refuse to do so, you should report the matter to your managing broker (who should ensure that it is brought to BCFSA’s attention). Advise the seller: that the offer does not include or alters a Standard Assignment Term; that the buyer’s real estate professional has failed to provide a Notice Regarding Assignment Terms form in accordance with the Real Estate Services Regulation; whether the proposed contract may be assigned, and if the proposed contract may be assigned, about any conditions in the contract on the right of assignment of the contract, andabout the seller’s entitlement under the contract to any profit resulting from an assignment of the contract, if applicable.

  The seller can then instruct you on how they wish to proceed.

• I am working with a seller who is contractually entitled to “any profit resulting from an assignment.” How and when will my client receive that “profit”?

  If you are working with a seller who has entered into a contract of purchase and sale that contains both of the Standard Assignment Terms, and the buyer proposes an assignment of the contract, you should advise the seller that before consenting to the assignment, they should clearly understand:the amount that the buyer is suggesting is “profit”,the basis for the buyer’s calculation of that amount; andhow and when that amount will be paid to the seller.

  If the seller has any questions or concerns, you should advise them to seek independent legal advice before they consent to the assignment. The Real Estate Services Regulation does not address how or when a “profit” is to be paid to the seller, so these issues may be resolved by negotiation between the buyer and seller.

• What remedies are available to the seller if they do not receive the “profit” from an assignment?

  The Regulation does not address how a seller is to enforce a contractual right to receive “profit” resulting from an assignment of the contract.

  If you are working with a seller who has questions about the remedies available to them if the buyer refuses to pay them the “profit” component of an assignment, you should advise them to seek independent legal advice.

Using the Notice to Seller Regarding Assignment Terms form FAQ’s

• Are sellers required to sign the Notice Regarding Assignment Terms form?

  No. Sellers are not required by the Real Estate Services Regulation to sign the Notice Regarding Assignment Terms form. However, real estate professionals must use their best efforts to obtain the seller’s signature as confirmation that the seller has received and read the form. This provides proof that the real estate professional has complied with the Regulation.

• Who is responsible for seeking the seller’s signature on Part B of the Notice Regarding Assignment Terms form?

  Where a buyer’s real estate professional is providing the form directly to an unrepresented seller, the buyer’s real estate professional must use best efforts to obtain the seller’s signature on the form. Where a seller’s real estate professional has received the form on behalf of the seller, and is providing the form to the seller, the seller’s real estate professional must use best efforts to obtain the seller’s signature on the form.

• Once the form has been presented to the seller, who else receives a copy?

  If the seller is working with a real estate professional: Once the form has been provided to the seller, the real estate professional must provide a copy (preferably one that has been signed by the seller) of the form to the buyer’s real estate professional, and the managing broker for the seller’s real estate professional.

  If the seller is unrepresented: Once the form has been provided to the seller by the buyer’s real estate professional, the buyer’s real estate professional must provide a copy of the form (preferably one that has been signed by the seller) to the managing broker of the buyer’s real estate professional.

• What are the requirements for brokerages?

  Section 29(a) of the Real Estate Services Rules requires both listing and selling real estate professionals to submit to their managing broker copies of each Notice to Seller Regarding Assignment Terms form provided to a seller. Brokerages are required under section 83(1)(d) of the Real Estate Services Rules to retain copies of the forms.

• Which brokerage should complete the “Brokerage Use Only” section of the Notice Regarding Assignment Terms form?

  Any managing broker, or their designate, whose licensees have been involved in an offer in which the form has been required, must fill out the “Brokerage Use Only” section and retain a copy of the form in the brokerage’s records. If the offer was accepted, the form should be kept in the related deal file. If the offer was not accepted, the form should be kept in a general file.

Guidance in Other Situations FAQ’s

• Do the requirements apply if a buyer wants to relist immediately after closing?

  The requirements will not impact a buyer who takes title to a property and then re-lists it or transfers title for a higher price, as that scenario does not involve the assignment of a Contract of Purchase and Sale.

• Are there exceptions to the requirements?

  The requirements apply in all transactions involving a real estate professional, except where the contract is for the sale of a development unit by a developer, as those terms are defined in section 1 of the Real Estate Development Marketing Act.