Real estate litigation lawyer, Arsen Krekovic talks in this post about the implications and potential liabilities in BC associated with revoking an offer to purchase real estate. Navigating the process of revocation carefully for clients involved in a real estate transaction follows. Krekovic covers essential elements that include communication, dealing with the potential legal risks involved, and finding alternative options for terminating a real estate deal.
Let’s break it down to the basic elements and the fine points that complicate pulling out of a deal in progress.
Timing: When can a party revoke an offer in a real estate transaction?
- Offer and acceptance: The offer represents a proposed contract that has not yet been accepted by the other party. It’s crucial to distinguish between an offer and an accepted contract when considering revocation. Accepted offers with subject conditions can create enforceable contracts that are not revocable. It’s important to consult a legal specialist in this, because a poorly drafted set of subjective conditions may fail to create a binding agreement.
In such cases, seeking immediate legal advice is recommended if a client wishes to revoke or withdraw from an accepted offer, regardless of whether it is conditional or not.
- Essential terms: To form a firm and binding agreement, all essential terms must be included in the contract.
Missing material terms, such as an outside completion date for a new home build, can compromise the parties’ legal position and potentially lead to revocation.
Communication is key in the process of revocation in a real estate property deal
- Revocation must be communicated clearly through express communication or clear and unequivocal actions.
- Presenting a counteroffer will revoke the original offer, rendering it incapable of acceptance.
- Timing is crucial when revoking an offer. It is in everyone’s best interests to promptly convey the decision to revoke. Follow that up with written confirmation. Documenting all communication in writing not only ensures clarity but also transparency and reduces the likelihood of disputes.
In what situations can revocation occur?
There are several situations in which an offering party may wish to revoke an offer:
- Counteroffer from a preferred buyer: Seller X has made a counteroffer to Buyer A, but they just received a higher and better offer from Buyer B, whom they prefer. In this case, Seller X may wish to revoke the initial offer and accept Buyer B’s offer.
- Withdrawal due to a new listing: Buyer A has made an offer to Seller X, but a new listing has emerged that Buyer A prefers. Consequently, Buyer A may choose to withdraw their offer to Seller X.
- Non-participation in a multiple offer situation: Buyer A has made an offer to Seller X, and Seller X has informed Buyer A about a multiple offer situation. If Buyer A does not wish to participate, they may decide to revoke their offer.
Another layer of revocation can occur for home buyers
Revocation vs. Home Buyer Rescission (HBRP) vs. Subject Conditions
The stage of contractual formation may impact the best option for terminating a deal.
- Unaccepted Offer/Unaccepted Counteroffer: Revocation is possible by clearly and unequivocally communicating the decision.
- Accepted Offer within three business days: The Home Buyer Rescission Program (HBRP) allows the buyer to rescind the offer, provided certain conditions are met.
- Accepted Offer with Subject Conditions: If unable to fulfill or waive subject conditions, a mutual release may be necessary.
CONTACT a lawyer specializing in real estate litigation to understand the best course of action to match the stage you are at.
Some of the legal risks associated with revocation
Revoking an offer carries a high degree of legal risk, as case law interpretations can depend on specific facts. In situations where a client intends to revoke an offer, especially if the other party claims acceptance has already occurred, it’s critical to consider seeking legal advice before taking further steps.
Reach out to the real estate litigation specialists at Hoogbruin & Company to fully understand the process of revoking an offer to purchase real estate in British Columbia. A lawyer experienced in navigating the revocation process, can help with sharing legal advice. It also ensures that critical clear communication is maintained, and the potential risks and liabilities associated with revocation can be minimized.
“Our priority is to provide accurate guidance and protect the interests of clients throughout this complex process,” says senior real estate counsel and litigator, Arsen Krekovic.