Chronique de la Chambre des notaires: The importance of an offer to purchase

I've visited several houses and I like them all. Can I make an offer to purchase each of these properties? After all, an offer to purchase isn't a contract, is it?

What is an offer to purchase?

An offer to purchase (or "promesse d'achat") is a preliminary contract which, once signed, is binding on both parties. The term "avant-contrat" means that another contract, in this case the contract of sale, must be signed before ownership can be considered to have been transferred from the seller to the buyer. The offer to purchase is therefore not a sale in the strict sense of the term, but it does have important legal effects: by signing it, the buyer undertakes to buy and the seller to sell.

If you wish to add, delete or modify certain terms or clauses of the offer after it has been accepted, you must obtain the consent of all parties involved. Otherwise, the text of the offer is definitive.

A well-written offer to purchase

An offer to purchase should contain all the information relevant to the transaction. The more precise the offer, the less it will be open to interpretation. It should contain, among other things

• Information concerning the identity of the parties (buyer(s) and seller(s), as well as the latter's spouse in certain cases);
• The most precise possible description of the property;
• The price and how it will be paid;
• The date on which you plan to sign the sales contract at the notary's office and take possession of the property, as well as the date on which the buyer will occupy the premises. These dates may be different in some cases;
• The name of the notary who will receive the deed of sale;
• Guarantees required;
• Conditions precedent to the sale (e.g. pre-purchase inspection, obtaining a mortgage with indication of the amount of the buyer's loan, etc.);
• The seller must obtain a recent certificate of location establishing the current status of the property;
• A statement by the seller, as detailed as possible, as to the condition of the property and its compliance with by-laws (including municipal by-laws) and applicable laws;
• Any other clause relevant to your situation.

Of course, the offer to purchase must include the signature of both the offeror and the seller. In some cases, the signature of the seller's spouse is also required. This is the case, for example, when the property is a "family residence" as defined by law. In addition, the offer must be signed by the deadline specified in the offer.

How do I withdraw from an offer to purchase?

If any of the conditions mentioned in the offer are not fulfilled within the deadline, you may terminate the offer in accordance with the terms and conditions set out in the document.

On the other hand, if all the conditions of the offer are met, your commitment is normally irrevocable, unless the offer contains a clause known as a "right of withdrawal". This is the only clause that allows you to withdraw from your obligations within a given timeframe. For example, if you buy a new house from a developer or builder, and intend to live in it, the offer must stipulate that the promisor-buyer may withdraw from the offer within 10 days. The developer or builder may demand an indemnity, the amount of which is governed by law, but cannot force you to waive this right.

Finally, the parties may include a clause allowing them to withdraw from the signed offer to purchase, usually on condition that the withdrawing party pays the other party a certain sum in compensation for any damage this may cause.

What happens if I don't accept the purchase offer? 

The signed offer is binding on both parties. If the buyer or seller refuses to sign the deed of sale, they can take legal action, known as "action en passation de titre".

A formal notice will first be sent to the recalcitrant party, requesting him, within a given timeframe, to respect his commitments and sign the deed of sale under the conditions mentioned in the offer. If the latter fails to comply, the party wishing to finalize the sale is entitled to bring an action. The action for transfer of title may also be accompanied by a claim for damages. The sums claimed in this respect usually represent the damages suffered by the plaintiff as a result of the delay in obtaining title to the property. If the judge accepts, his judgment will take the place of the deed of sale and have all its effects.

That's why it's vital that any offer to purchase is drafted clearly and precisely. Failure to do so can have serious consequences. Whether you're buying or selling, the importance of such a document should always prompt caution and reflection. The safest thing to do is to consult your notary before signing anything. As a specialist in real estate law, your notary is in a position to provide a rigorous legal analysis of the document, and to point out any necessary corrections. It's up to you to put your notary's experience to work for your peace of mind!

Do you have any questions?

View the " Offer to Purchase " video, the " Title Examination " video and the " Buying a Property " brochure.

For more information, visit the Chambre des notaires website.

Call our toll-free number 1-800-NOTAIRE (1-800-668-2473) to speak to a notary. This service is available Monday to Friday, 8:30 a.m. to 5 p.m.