“Chand et al. v. Sabo Bros. Realty Ltd. et al., [1979] 2 W.W.R. 248 at 258 (Alta. C.A.), the Court held that a realtor was liable for failing to appreciate the importance of completing the purchase agreement correctly. In particular, the realtor had failed to get a dower consent.”

cited in: Johnston v. Re/max Real Estate (Edmonton) Ltd., 2004 ABQB 212.

In Chand, the vendors Realtors were held liable in negligence to the PURCHASERS when the putative Purchase and Sale Agreement fell through.

Basically the facts in Chand were that a property, shown only in the husband’s name in Land Titles, was subject to a listing agreement. That listing agreement was signed by both the husband and wife and the realtors assumed that the property was held in joint names. When problems arose with the wife in the course of the transaction, the plaintiffs settled their claim against the vendors and then claimed against the realtors. The plaintiffs claimed the Realtors had professed a professional expertise and that founded a duty to the Plaintiff/Purchasers.

Judgment was given against the realtors for the damages incurred, ie. legal fees, value of land and a loss of a favourable mortgage interest rate at the time.

The better practice, for realtors is to always check the Vendors title - something that has become more affordable and available under SPIN.

The idea that consent is not required with the transfer if it is given with the contract doesn’t really fit because land titles requires dower consent, leaving us with the “too much trouble” theory. You’d think for the commissions being earned they would be willing to arrange for commissioners. They are not difficult to find.

“Realtors generally want to get the land sold and receive their commission, leaving lawyers with the details.”

This is precisely the problem, and it fits nicely among the other issues that often lead me to wonder what many realtors do to earn their significant commissions. (Not all since there are obviously good and thorough realtors out there)

I wonder if this might change if realtors were made aware that without Dower consent their commissions remain vulnerable.

I believe that there are a number of reasonable explanations for not including Dower Act Releases in a Standard form Purchase and Sale Agreement, including:

1. Not all lands are homesteads.
2. Many realtors are reluctant to have “more paperwork” than absolutely necessary when finalizing a Purchase and Sale Agreement.
3. Issues as to coercion, independent advice, agency obligations etc. could arise. For example the Dower Act requires that someone meet with the spouse separately, with a witness who should then execute an Affidavit of Execution. The issue would arise for example whether the Realtor was providing legal advice (although lawyers can act as Realtors).
4. Purchase And Sale Agreements are often not considered absolute dispositions, there may be preconditions such as the Vendor obtaining consent from a divorced spouse, satisfactory proof of financial capacity (for Vendor-take-back mortgages) or any one of a number of other Vendor inspired conditions.
5. The Dower Act specifies in s. 4(2) a specific form - which could be accomplished by the Realtor, but errors and mistakes can happen - better to have the lawyer responsible in the process of preparing the documents.
6. A Standard Form Purchase and Sale Agreement cannot usually be considered for registration without some further, usually Court based relief. While s. 64 of the Land Titles Act says that an owner “may” execute a Transfer of Land in FORM 8 - the policy of the Registrar is to examine all documents to ensure that all of the requirements are met, the name matches the Certificate of Title, the legal description is correct, the interest transferred is correct, Dower Act as been complied with, Foreign Ownership of Land is required etc.
7. Standard Form Purchase and Sale Agreements contain signature lines for “Vendor” and “Co-Vendor/Spouse”.

In short - Realtors generally want to get the land sold and receive their commission, leaving lawyers with the details.

“Disposition” is defined to specifically include an “agreement for sale” in section 1(b)(ii)(A). “Agreement for sale” would have to be read much more narrowly than usual to exclude a contract for the sale and purchase of land. Before the Supreme Court of Canada’s 1996 decision in Semelhago v. Paramadevan, [1996] 2 S.C.R. 415, there was no question that a contract for the sale and purchase of land was an agreement for sale. Post-Semelhago, it may be that an argument could be made that the category “agreement for sale” should be narrowed to include only those agreements for the sale of land which take the place of a mortgage. But that argument has not been made, as far as I am aware, and I would be very surprised if that was the reasoning behind the omission of the Dower Act consent from the standard form contract for the sale and purchase of land.

Standard real estate purchase and sale agreements should include Dower Act consent and acknowledgment forms. Why don’t they? It may be that section 6 of the Dower Act suggests there is a choice: provide the Dower Act consent and acknowledgment on the agreement for sale or on the transfer. Section 6(1) provides that when a spouse has consented to the sale of the homestead under an agreement for sale and acknowledged that consent, then no further signature or acknowledgment is required on the transfer. Or it may be that the Dower Act requirement for an acknowledgment before a commissioner or notary public is an obstacle, making the acquisition of a proper consent seem like too much trouble, especially if there are conditions precedent in the contract. Or it may be that Dower Act consent and acknowledgment on the listing agreement is wrongly thought to be enough.

Whatever the reason for the omission, the omission of Dower Act consents and acknowledgments is risky. In the Charanek v. Khosla case, it was not the spouse of the married person who challenged the lack of consent. But a condition precedent-free contract for the sale and purchase of land that requires and does not have a Dower Act consent and acknowledgment could easily be successfully challenged by the spouse whose consent was required.

The contracts are signed and delivered to the lawyers without such consent almost always, and as a result it seems to be standard that transactions of this type are concluded exactly as in the Charanak case where the dower consent is included with the transfer and NOT with the contract.

Does this mean that a significant number of transactions in Alberta involving dower issues would be ineffective? Also, why would the Alberta Real Estate Association not insist that Dower consent be included and add a consent form page to their existing standard contract?