Presentation on theme: "Guidelines on the Offer and Acceptance Document Presented by Sharon Officer Principal Proactive Compliance Officer."— Presentation transcript:
Guidelines on the Offer and Acceptance Document Presented by Sharon Officer Principal Proactive Compliance Officer
To review some basic contractual principles; To analyse the essential elements of the Contract for the Sale of Land by Offer and Acceptance; To gain a general understanding of the duties and obligations imposed on agents and sales representatives; To appreciate the consequences of inaccuracies in the contract. Objectives
Offer and Acceptance Contracts for the sale of land or any interest in land are required to be in writing.
Offer and Acceptance Section 34 (1) (a) of the Property Law Act 1969 (WA) provides: No interest in land is capable of being created or disposed of except by writing, signed by the person creating or conveying the interest, or by his agent thereunto lawfully authorised in writing, or by will, or by operation of law.
Offer and Acceptance An offer is a definite undertaking. A proposition which will become a contract upon its acceptance.
Offer and Acceptance An offer must be communicated. Article 12 - Code of Conduct An agent must communicate all written offers to his or her principal (seller) as soon as practicable.
Offer and Acceptance An offer can be revoked at any time prior to the communication of acceptance.
Offer and Acceptance Once an offer is made it can be either accepted or rejected.
Offer and Acceptance A counter offer is a rejection of an offer. The counter offer is in fact a new offer which may be accepted or rejected.
Offer and Acceptance Acceptance must be communicated to the offeror (buyer). If not communicated there can be no contract.
Offer and Acceptance Acceptance by fax: There is no contract if a faxed acceptance is not received.
Offer and Acceptance Acceptance receipt The contract is made at the time and place of receipt of the acceptance by the offeror (buyer).
Offer and Acceptance Legislation Article 5 - Code of Conduct (These provisions relate to the conduct of agents/reps generally but have particular relevance when an agent/rep constructs a contract.) 5 (1)An agent must act fairly and honestly. (2)An agent must not knowingly mislead or deceive any parties in negotiations or a transaction. (3)An agent must not engage in harsh or unconscionable conduct.
Offer and Acceptance Code of Conduct agent 6 (1) An agent must properly supervise the agency …and take reasonable steps to ensure that sales representatives… comply with the provisions of the Act, this Code and other relevant statutes, rules and regulations where applicable to them. proving 6. (4) If a sales representative fails to comply…the agent in bona fide control of the agency…shall have the onus of proving that he or she complied…..
Offer and Acceptance Code of Conduct 7. An agent (or sales representative) must exercise skill, care and diligence.
Offer and Acceptance The agent (or sales representative), in drafting the contract, must give complete effect to the wishes of the seller and the buyer. Otherwise it cannot be said that there has been a meeting of the minds of the seller and buyer. (Disputes, complaints and legal wrangles can all be alleviated Here!)
Offer and Acceptance Two or more purchasers: ENQUIRE whether the concurrent interest in the land is to constitute a Joint Tenancy or a Tenancy in Common.
Offer and Acceptance Agents/reps should ensure that they fully canvass with the seller which chattels, if any, are included in the sale and that these are specifically noted in the contract.
Offer and Acceptance Is the dishwasher a chattel or a fixture? The garden shed? The heirloom chandelier? Kreepy Krawley?
Clause 1(4) - Joint Form of General Conditions. N.B. Agents who don’t promptly advise their sellers of the dishonour of the deposit cheque (or non payment of the deposit) are in breach of Article 2 of the Code of Conduct.
Offer and Acceptance Deposits: How much? Who holds it? Finance clause…..look at definitions e.g. acceptable terms and conditions. What happens to the deposit if the deal falls over?
Offer and Acceptance The prescribed requirements for separate accounts - Regulation 6E. request An agent should only comply with the request for a separate account if the agent is satisfied that: (a) the amount of monies paid to the agent exceeds $20,000; or (b) the transaction is not to be settled within 60 days.
Offer and Acceptance The prudent agent will, as a bare minimum: Be fully informed as to the lending criteria of, at least, the major lenders servicing the industry; Properly satisfy him/herself that the conditions of the offer to lend are acceptable to the buyer. Properly qualify the buyer;
Article 8 of the Code of Conduct provides: (1)Prior to the execution by the agent’s principal of any contract relating to the sale or lease of any real estate or business the agent must make all reasonable efforts to ascertain or verify the facts which are material to that transaction which a prudent agent would have ascertained. (2)If an agent ascertains a fact which is material to a transaction in which the agent’s principal is involved the agent must promptly communicate that fact to any person who may be affected by it unless it is clear that person was already aware of that fact. Offer and Acceptance
Special Conditions Subject to white ant Subject to 48 hour clause Pre-approved finance Settlement + - 10 days from finance Everything to be in good working order
Offer and Acceptance If there is a fixed term lease (to Sept 30) and the owner sells with settlement on 31 July what happens to the tenant?
Offer and Acceptance - Buyers If a buyer inspects 10 properties with an agent/rep & makes an offer on one, what is the agent/rep – buyer relationship?
Offer and Acceptance - Buyers If the buyer wants to “test the waters” and make a low offer - must their offer be presented? What happens if there are three offers on the same property at the same time?
Offer and Acceptance 48 Hour Clause What is a 48 hour clause? When does it begin? When does it end? What happens if……..?
Disclosures What kind of thing needs to be disclosed? How are disclosures made?