Article from Volume 12, Issue Number 3, 2025

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New offer-to-purchase forms Introduce substantive changes

By Maureen Terra | Other articles by Maureen Terra | Feature

The offer-to-purchase forms mandated under The Real Estate Services Act for use when selling completed single-family residential homes or units in a condominium are approximately 30 years old. New forms that come into effect on Nov. 1, 2025, will introduce substantive changes to real-estate practices in Manitoba. 

Here are some highlights:

• Every offer-to-purchase contract will be in two parts:
  • Part one contains the specifics of the agreement for sale; 
  • Part two contains standard terms, which may be amended in part one.
• The names of the buyer and the seller now have to match their government-issued identification.
• There is no longer a specific time of day set out in the form for closing on the possession date. The form now defaults to no later than 6 p.m.
• The purchase price must be paid in full by the possession date (as is already the case in most jurisdictions across Canada). If a portion of the purchase price is to be paid from the proceeds of a new mortgage and there is a delay (of a maximum of seven days) in the receipt of those proceeds, the buyer has to pay to the seller
  • Interest at the policy interest rate of the Bank of Canada plus 7 per cent, and 
  • the seller’s reasonable costs and expenses resulting from the delay to the extent that such expenses exceed that interest.
  • And no alterations or renovations can be made to the property until the balance ofthe purchase price, interest and expenses are fully paid.
• The common law obligation imposed on buyers to exercise good faith in their effort to satisfy their conditions is now set out in the form. This may include requiring buyers to provide evidence to demonstrate their efforts to satisfy a condition, such as a letter from a financial institution denying a mortgage.
• The seller’s representations and warranties have been expanded.
  • Sellers must ensure sewer and water accounts must be fully paid based on an actual (not estimated) meter reading within 90 days preceding the possession date.
  • All permits known by the seller to have been required must be obtained and satisfied;
  • Sellers must satisfy their common-law obligation to disclose all material latent defects in the unit, namely defects that are not readily visible upon personal inspection but are known to the seller and which render the unit unfit or unsafe to occupy for residential use without remediation.
  • Sellers must ensure fixtures and included chattels with “…electrical, mechanical, plumbing, heating or air exchange or conditioning components shall be in proper working order”, and that fixtures and included chattels that are subject to rental or financing contracts are now required to be paid out by the seller and transferred clear to the buyer with the property.
  • Sellers must confirm they have not been informed of a special assessment being approved and payable at a later date. (This is a key element that is often not disclosed until the buyer orders a Status Certificate, after the cooling-off period has already expired.)
• There is no longer a section to insert which representations or warranties survive closing. The common law applies: Representations (including those in any property disclosure statement) don’t survive closing (absent fraud), but most warranties will survive closing
• If a property suffers substantial damage that is not repaired before the possession date:
  • The seller’s insurance policy, if any, is to be maintained by the seller between
  • the time the offer is accepted and the closing of the transaction.
  • If there is damage during this interim that may not be repaired, the buyer is entitled to a pre-closing inspection to assess and consider remediation options.
  • If there is damage during this interim that is not repaired and if a remediation plan is not agreed upon, the buyer’s options are:
    • to terminate the contract, or
    • to accept the property as is and the insurance proceeds, if any, and complete the transaction.
• The buyer may still nominate another party to take title with or on behalf of the buyer but assignment of the contract without the seller’s written consent is prohibited. 
• Sellers must indicate their intention to be resident in Canada on the possession date, and when applicable agree to apply for a Certificate of Compliance under section 116 of the Income Tax Act. (In the event the seller does not live in Canada at closing, a minimum of 25 per cent of sale proceeds have to be withheld until a certificate from the Canada Revenue Agency is obtained.)
• The Property Disclosure Statement has been narrowed to the time frame that the seller owned the property, expanded to include new representations, and the answers have been changed to “Correct,” “Not Correct” and “Do not Know”

These changes, and in particular the requirement to pay all funds on closing, are going to necessitate modernization of real-estate practices, such as the electronic movement of funds between lenders and law offices, as well as between law offices. It will also require title insurance to play a key role in ensuring lenders and buyers are covered when funds are released before title issues.

Maureen Terra, who practices law under Maureen Terra Law Corporation http://www.mterra.ca/, is a professional member of CCI Manitoba. A lawyer with more than 20 years of experience in real-estate law, including as a former district registrar for the Land Titles Office, she also instructs the Real Estate Transactions course at the University of Manitoba’s Robson Hall law school and is a Relicensing Education Instructor for the Manitoba Real Estate Association.