guidelines on the offer and acceptance document presented by sharon officer principal proactive...

Guidelines on the Offer and Guidelines on the Offer and Acceptance DocumentAcceptance Document

Presented byPresented by

Sharon OfficerSharon Officer

Principal Proactive Compliance Principal Proactive Compliance OfficerOfficer

• 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.


Section 34 (1) (a) of the Property LawAct 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.


An offer is a definite undertaking.

A proposition which will become a contract upon its 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.


An offer can be revoked at any time prior to the communication of acceptance.


Once an offer is made it can be either accepted or rejected.


A counter offer is a rejection of an offer.

The counter offer is in fact a new offer which may be accepted or rejected.


Acceptance must be communicated to the offeror (buyer).

If not communicated there can be no contract.


Acceptance by fax:

There is no contract if a faxed acceptance is not received.


Acceptance

The contract is made at the time and place of receipt receipt of the acceptance by the offeror (buyer).


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.


Code of Conduct

6 (1) An agentagent 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.

6. (4) If a sales representative fails to comply…the agent in bona fide control of the agency…shall have the onus of provingproving that he or she complied…..


Code of Conduct

7. An agent (or sales representative) must exercise skill, care and diligence.


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!)


Two or more purchasers:

ENQUIRE whether the concurrent interest in the land is to constitute a Joint Tenancy or a Tenancy in Common.


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.


Is the dishwasher a chattel or a fixture?

The garden shed?

The heirloom chandelier?

Kreepy Krawley?


Have the following been addressed?

•Easement (right)(right)

•Right of way (beware)(beware)

•Caveat (requirement)(requirement)

•Encumbrance (claim)(claim)

•Memorial (memorandum)(memorandum)

•Restrictive covenant (restriction)(restriction)


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.


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?


The prescribed requirements for separate accounts - Regulation 6E.

An agent should only comply with the request 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.


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.



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


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?


48 Hour Clause48 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?

Questions please


guidelines on the offer and acceptance document presented by sharon officer principal proactive...

Documents

acceptancean offer

new offer

acceptancea counter

acceptancethe agent

complythe agent

code of conductan agent

sale of land

communication of acceptance