Real Estate Act
Part 2 - Regulation of Business of an Industry MemberSection 20 - Guaranteed Sale Agreement
In this section, “guaranteed sale agreement” means an agreement in writing under which an industry member or another person on behalf of or to the benefit of an industry member undertakes to pay to the seller of real estate within a fixed or determinable period of time a fixed or determinable amount of money in respect of that seller’s real estate.
|(2)||An industry member who enters into a guaranteed sale agreement or has another person enter into a guaranteed sale agreement on behalf of or to the benefit of that industry member shall maintain a separate trust account in a bank, loan corporation, trust corporation, credit union or treasury branch in which money payable under this section must be deposited.|
|(3)||When a guaranteed sale agreement is entered into by an industry member or other person on behalf of or to the benefit of an industry member, that industry member shall deposit into the trust account maintained under subsection (2) not less than 5% of the total amount that may be payable under the guaranteed sale agreement.|
|(4)||When money is deposited under subsection (3), it must be held in trust for the seller and must be|
|(a)||paid to the seller or to some other person as directed by that seller as part of the total amount payable under the guaranteed sale agreement,|
|(b)||forfeited to the seller if the seller is not paid in accordance with the guaranteed sale agreement, or|
|(c)||returned to the industry member when, pursuant to the terms of the guaranteed sale agreement, there is no longer any money payable to the seller under that guaranteed sale agreement.|
Subject to subsection (6), money deposited under subsection (3) must remain on deposit in Alberta until it is paid out under subsection (4).
|(6)||Section 25(4) applies in respect of a trust account under this section.|
|(7)||When a deposit is forfeited under subsection (4)(b),|
|(a)||the forfeiture does not prejudice any action that the seller may have against the industry member or other parties to the guaranteed sale agreement, and|
|(b)||the money forfeited may be applied toward any sum that the seller may be entitled to receive as damages arising out of the non‑performance of the guaranteed sale agreement.|
|(8)||When an industry member or other person who enters into a guaranteed sale agreement with a seller purchases the seller’s real estate pursuant to that sale agreement, no commission is payable to that industry member or other person by that seller in respect of that trade.|
1995 cR-4.5 s20