The offer to purchase usually indicates a period during which the seller can accept or refuse it. It is essential to attach a period of acceptance and notification to the offer to purchase. This period is equivalent to the period of time during which this offer to purchase will remain valid. The seller can then accept or refuse it. Failing to include this period in the offer to purchase, the Civil Code of Quebec provides that it will lapse on the expiry of a reasonable time. In addition, the offer to purchase may include suspensive conditions for which it will be necessary to determine a deadline for completion.
This type of condition makes it possible to suspend the validity of the offer to purchase until the realization of a future and uncertain event that it foresees, for example the obtaining of mortgage financing. These suspensive conditions must provide for sufficient time, so that the promisor buyer has an adequate reaction time before they expire.
Deadline for acceptance of the offer
The period of validity of an offer to purchase is not regulated by law, but usage has set this period of 2 to 3 days on average. The acceptance period is usually one that is a mandatory delay. The offer to purchase must thus indicate the date and time limits imposed on the seller to accept the offer to purchase. In principle, it cannot be revoked until the period indicated has elapsed, unless the promisor buyer can do so before the seller receives it. In such circumstances, the whole thing would become null and void, even if the offer to purchase was initially accompanied by a deadline for completion.
Deadline for notification of the offer
The offer to purchase must determine the period of time allotted to the seller so that for him to notify his acquiescence to the offer to purchase in order to be valid. The deadline for responding to the offer is usually a "hardship period", i.e. the offer becomes invalid as soon as the deadline is exceeded. In that regard, it is necessary to provide for a very specific method of notification, in particular by means of a certified letter, a dispatch by bailiff or through a real estate broker. In this last case, the promise to purchase will automatically bind the parties without requiring a specific notification to formalize it. However, real estate brokers will still have the obligation to notify the buyer or seller, as the case may be, of the acceptance of the offer in order to be able to start the deadlines relating to the suspensive conditions.
Deadlines for fulfilling the conditions precedent
It is absolutely essential, as with any suspensive condition, to set a deadline for completion, i.e. the maximum period left to the buyer to obtain the financing or documents.
Upon acceptance of the offer, the promisor-buyer must meet the suspensive conditions set out in the offer to purchase within the prescribed period. The most common are to obtain the necessary financing and have an inspection of the property done by a recognized expert. The time to complete this suspensive clause should not be long enough to obtain financing, particularly when the loan is to be guaranteed. Generally, this period should be at least 14 days, the time to the promisor-buyer to allow him to take the necessary steps to obtain a loan offer from a lending institution of his choice. However, it is possible to negotiate this period to give yourself a little more time to build your file or compare different offers. In the event that the purchaser does not obtain his loan under the conditions provided for in the offer to purchase, he will be released from his commitments, and the deposits already paid will therefore be returned to him.
A certain number of documents or information must be obtained by the promising buyer from the syndicate to enable it to make an informed choice. This applies, in particular, to the declaration of co-ownership and its amendments, the documents relating to the financial situation of the co-ownership, the maintenance book of the immovable and the minutes of the board of directors and the meeting of the co-owners. Article 1068.2 of the Civil Code of Quebec requires the syndicate of co-owners to give the promising buyer, with diligence, a copy of these documents or information. Although this notion of diligence is not defined in terms of duration, the syndicate must act quickly and effectively. Therefore, the deadline for completing this suspensive clause should not exceed 15 days.
Calculation of deadlines
The number of days left for the fulfillment of the condition should correspond to consecutive days, without exception. The deadlines recorded on the OACIQ's mandatory promise to purchase form for financing are always calculated in consecutive calendar days, in other words "days", i.e. twenty-four-hour periods, considered from midnight to midnight. Saturdays and Sundays as well as public holidays are counted among the calendar days. The day that marks the starting point, the date of acceptance of the promise to purchase, is not counted, but the date of maturity is. The period granted begins to run the day following the signature of the acceptance of the promise to purchase, but it is not a mandatory delay (unless otherwise stipulated) since its non-compliance does not automatically entail the cancellation of the promise to purchase.
WHAT YOU SHOULD KNOW! The acknowledgement of receipt of an offer by the vendor is not the formal acceptance of the offer to purchase. If the vendor does not respond in the said time limit, the offer will become null and void and any deposit shall be returned.
WHAT TO KEEP IN MIND: The acceptance must be unconditional. The response to an offer to purchase in which the vendor includes one or more conditions is not an acceptance. The same principle applies to any amendments which modifies it in any material aspect.
WARNING! The Quebec Court of Appeal has already concluded that "the time limit stipulated in an accepted offer to purchase is not de rigueur unless the parties have concluded it so."
