Contract validation consists of drafting a property transfer contract; verifying the identity of the parties to the contract and their agents; reviewing the contract to ensure it complies with applicable law, that it does not circumvent the law, and that it is consistent with standard practice; and assessing whether concluding the contract gives rise to an event that would cause damage.
The advocate must identify, and verify the identity, of the parties to the contract (or their representatives).
If the contract is for transfer of property for consideration, the advocate will advise the parties of the payment terms of the purchase price agreed under the contract and will include in the contract the representation of the parties that they have been advised of the payment terms. The advocate must advise the parties to the property transfer contract of the amount of their professional indemnity insurance cover for real estate transactions along with the name of the insurance company providing the cover.
Contract validation is carried out only on the request of the client, and the validation must be done by the advocate personally and not by his or her appointed representative.
If the contract consists of more than one page, the advocate must secure all the pages together in a manner to prevent tampering, including any inseparable annexes and a title plan, if any. For the transfer of title to residential units and non-residential premises, a statement is attached to the property transfer contract from the management company or president of the owner’s association confirming that the owner of the property is not in arrears of service charges or contributions to the operating, maintenance and repair fund.
The advocate confirms validation of the contract by adding a validation clause that guarantees the content of the contract will remain unaltered; the validation clause cannot be placed on a blank page.