Understanding the Residential Purchase Contract – Clause 1.1(b), “these unattached goods”

When buying or selling a property in Alberta, and in most provinces, the buying and selling process is governed by the Residential Purchase Contract, or a similar document by another name, depending on the province you are located in. Here in Alberta, the Alberta Real Estate Association (AREA) creates the base contract for purchase and sale, and is a standard form contract more often than not.

However, within the Residential Purchase Contract, there are a few key clauses that are important to note, and that can dramatically affect a real estate deal, including having hidden costs for an unaware or inexperienced buyer, and there are ways to sell a property and save some money upon the sale.

The first and most important clause that can cause problems for a seller or buyer is clause 1.1(b). This clause describes the property being handled in the transaction under the Residential Purchase Contract, and dictates the unattached goods of the property. Normally when purchasing a property, you are entitled to all attached goods; in other words, meaning items that are physically affixed to the property, such as curtain rods, doors, etc.

However, items that are unattached, or are easily removed from the property, are technically not part of what is being bought and sold, and therefore it is best to name items that you have concerns about in this section. For example, dishwashers, fridges, air conditioners, washing machines, and stoves are just a few possible items that could be removed and would be arguably not part of your purchase.

Clause 1.1(b) allows you to list all of the items that you want included, in addition to the affixed items. For example, if you viewed the property and there was a piece of art on the wall that you found really brought the room together and that you wanted to be included in the purchase price, your clause 1.1(b) needs to list that item there. I’ve often had clients who see hand-made items that fit a space perfectly, and add that in to their 1.1(b) Residential Purchase Contract clause, so that they have the item that made them fall in love with the space!

As a seller you have to be cautious of this section as well; when selling a property, if something is listed under clause 1.1(b) and you fail to leave said item at the property upon the possession date, then you are in breach of the Residential Purchase Contract. Being in breach can allow the buyer to sue you for the cost of the item, breach of the contract, and specific performance, forcing you to provide said item. The most common occurrence I see of sellers forgetting to provide an item is window coverings.

The second and related clause to 1.1(b) is 1.1(c). Under 1.1(c), a seller can exclude certain items that would otherwise be considered ‘attached’. For example, if you have handmade shelves that have a sentimentality to them and you want to bring that with you upon departure, you should ensure that is listed under 1.1(c) so that the buyer does not argue that you have breached contract! TV mounts are often a trip-up under this section.

In short, understanding your Residential Purchase Contract is key, and an extensive exercise. Using an experienced realtor, and an experienced lawyer, can make the difference between a smooth and simple real estate transaction, and a hassle that continues for a while! We will have a number of further segments on this topic, for other important clauses!

Tune in next time for more tips on buying or selling real estate, from Greg von Euw with Alloy LLP!