BC Real Estate Trading Services Course Contract Law 2

Question 1

What is a 'counter-offer' in BC real estate and what is its legal effect?

Accepted Answer

A rejection of the original offer combined with a new proposal, which the other party may accept, reject, or counter

Answer

A counter-offer legally terminates the original offer and creates a new offer. The original offeror is no longer bound by their initial terms and cannot later accept the original offer. The counter-offer must then be accepted, rejected, or countered. Multiple counter-offers may occur before agreement is reached or negotiations fail.

Question 2

What is the 'Property Disclosure Statement' (PDS) in BC real estate?

Accepted Answer

A voluntary form completed by the seller disclosing known defects and material facts about the property, which does not replace the buyer's duty to inspect

Answer

The PDS is a voluntary form where the seller discloses known material facts about the property, including defects, environmental issues, and legal matters. While not legally mandatory, it is standard practice in BC. Importantly, it does not replace the buyer's obligation to conduct their own due diligence and inspections.

Question 3

Under BC law, what is the buyer's right of 'rescission' in a presale (new development) contract?

Accepted Answer

Buyers have a 7-day cooling-off period during which they can rescind the contract without penalty

Answer

Under BC's Real Estate Development Marketing Act, buyers of presale properties have a mandatory 7-day rescission (cooling-off) period. During this time, the buyer can cancel the contract for any reason without penalty, and their deposit must be returned in full. This protects consumers from high-pressure sales tactics at presale events.

Question 4

What is 'specific performance' as a remedy in BC real estate disputes?

Accepted Answer

A court order requiring the defaulting party to complete the transaction as agreed, rather than paying monetary damages

Answer

Specific performance is an equitable remedy where the court orders the breaching party to fulfill their contractual obligations. It is particularly relevant in real estate because each property is considered unique — monetary damages may not adequately compensate the non-breaching party. Courts in BC may order a seller to sell or a buyer to buy as originally agreed.

Question 5

What is the effect of a 'time is of the essence' clause in a BC real estate contract?

Accepted Answer

It means that deadlines specified in the contract are strictly enforceable and failure to meet them may constitute a breach

Answer

When 'time is of the essence,' all dates and deadlines in the contract are strictly binding. Missing a deadline — even by a few hours — can constitute a material breach, allowing the other party to terminate the contract. This is standard in BC real estate contracts and applies to subject removal, completion, and possession dates.

BC Real Estate Practice Test

BC Real Estate Practice Test

BC Real Estate Trading Services Course Contract Law 2