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Professional Standards Manual

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6. Real Estate Development Marketing Act

(c) Disclosure Requirements

If a development unit is not exempted, section 14 of the Real Estate Development Marketing Act requires that before marketing a development unit, the developer must prepare and file a Disclosure Statement with the Superintendent of Real Estate. The Disclosure Statement must be in the form and include the content required by the Superintendent and, without misrepresentation, plainly disclose all material facts.

A developer may not enter into a purchase agreement with a purchaser for the sale or lease of a development unit unless a copy of the Disclosure Statement has been provided to the purchaser, the purchaser has been afforded an opportunity to read the Disclosure Statement, and the purchaser has signed a written statement acknowledging that the purchaser had an opportunity to read the Disclosure Statement. The Real Estate Development Marketing Act requires developers, or licensees offering the property for sale on the developer’s behalf, to retain the written statement from the purchaser for a period of three years.

It is not acceptable under the Real Estate Development Marketing Act to create a ‘‘subject to’’ clause to the effect that the offer is subject to the buyer receiving, reading and approving the Disclosure Statement. It is also not acceptable for a term to be created in the contract, which states that the seller will provide a copy of the Disclosure Statement to the buyer.

Licensees should ensure that the proper procedure has been adhered to when selling properties which require a Disclosure Statement, as improper compliance with this procedure could result in the buyer being able to revoke the offer and, subsequently, could result in the seller taking legal action against the licensees involved.

Disclosure Receipt Clause

The Buyer acknowledges having received and having had an opportunity to read the developer’s Disclosure Statement.

The Superintendent’s office has prepared a number of Policy Statements which set out the requirements for the Disclosure Statement for each type of development property. The Policy Statements require that the content of each Disclosure Statement must be set out in the order prescribed in the Policy Statement.

The Real Estate Development Marketing Act requires that if the developer becomes aware that the Disclosure Statement contains a misrepresentation, the developer must file either a new Disclosure Statement or an amendment to the Disclosure Statement and provide copies to new purchasers and to those who have entered into a purchase agreement but who have not yet received title or the interest for which the purchaser has contracted. A new Disclosure Statement must be filed if the identity of the developer has changed, or a receiver or liquidator has been appointed.