Inclusions and exclusions as part of a sale
How to prevent misunderstandings
You are interested in a particular property and are especially taken with the dining room chandelier. What should you do to make sure this doesn’t become a bone of contention in the transaction? More generally, how can you find out what is included or excluded as part of the sale? These are questions which come up very often and can be major source of disputes. To prevent this, here is how and when your broker has an obligation to help you under the Real Estate Brokerage Act.
What is always included
Equipment that is an integral part of the immovable, such as heating, electrical and lighting fixtures, is automatically included in the sale. It’s the law (Civil Code). Consequently, it is not necessary to specify these components in the sales contract or the promise to purchase. The only exception is when the seller explicitly excludes them from the sale.
Include or excluded: be specific, and negotiate!
- Anything that is not permanently attached to the immovable may be included or excluded as part of the transaction, including an appliance, a wine cooler, a hot tub, blinds, etc.
- If you want these included, you must clearly identify the items you wish to include or exclude in your transactional documents, making sure to specify the colour, brand and serial number.
- The broker must determine with the seller which items the latter wishes to include or exclude when selling his immovable. This information must be entered in the brokerage contract and on the detailed description sheet.
- As a buyer, it is very important to indicate specifically what you would like to see included or excluded in your promise to purchase.
- To make sure you don’t forget anything, exercise care: make sure you describe in writing what you wish to keep and carefully read what the other party wishes to include or exclude from the sale.
In the case of the walk-in closet, as to whether the shelves should have been included, the answer is: it depends if they were attached to the wall! If so, they were part of the property and were included in the sale. If they were removable, you would have had to indicate them clearly as inclusions in your promise to purchase in order to be sure to get them.
Your broker’s duties
In accordance with his professional and ethical obligations stipulated in the Real Estate Brokerage Act and enforced by the OACIQ concerning inclusions and exclusions:
- If you are the seller, your broker must specify them in detail under section 4 of the form brokerage contract to sell designed by the OACIQ for the protection of all the parties involved. In accordance with his obligation to verify, the broker is required to ask the seller if the items included in the sale are in good working order and can be used normally as of the date of delivery. As indicated in the brokerage contract to sell, the items included are sold “without legal warranty of quality, at the buyer’s own risk.”
- If you are the buyer, your broker must enter all the inclusions and exclusions you wish to specify on the promise to purchase. The included items must be in normal working order as of the date of delivery of the immovable. In addition, your broker can inform and advise you regarding the statements on the legal warranty of quality.
Equipment under a lease or bought on credit
Leased equipment or under a credit purchase contract, such as water heaters, monitored alarm systems or heat pumps, are often a source of conflict. Since they are not owned by the seller, in theory he cannot sell them, but sometimes people forget. Your broker’s role is to help you make the necessary verifications.
If the equipment is indeed leased and cannot be transferred to the buyer, your broker must make sure that this item is excluded from the sale.
However, if the contract concerning a piece of equipment allows it, this contract can be taken over by the buyer (equipment left on premises but whose cost will henceforth be assumed by the buyer).
Concerning items bought on credit, the broker must review the contract with the seller, or contact the merchant to check if the seller’s obligations can be transferred to the buyer. If so, the broker must describe in detail on the brokerage contract and the promise to purchase the equipment which will be taken over by the buyer.
Questions? Don’t hesitate to contact Info OACIQ.