Mutual Releaase Process & Completion

The Process:

Firstly please ready through the notes below on completing a Mutual Release.  There is some important information there for you.

When completing a Mutual Release you need to be aware of the following:

When we are on the Buyer Side

Because we are are not holding the deposit we can move a little quicker on these. 

• Tag the Release for signature using BrokerofRecord@HouseSigma.com   Broker of Record: Eva Liu or Steven Yanni (Managing Broker) Steven@HouseSigma.com

• For simplicity, Tag for the BOR signature at the same time you tag your clients

• When setting the signature order the BOR should technically sign after your clients though exceptions may be made

• When all signatures are in place you must forward a copy of the fully executed Mutual Release along with the Agreement of Purchase and Sale to Deals@HouseSigma.com so that we can retain a copy of all documents for audit purposes.

When we are on the Listing Side

The mutual release not only releases the parties from the transaction and any further claim, but it also provides irrevocable direction to the listing brokerage holding the deposit to release it as per the terms outlined.  Because of this we need to move a little slower.

• Tag the Release for signature using BrokerofRecord@HouseSigma.com   Broker of Record: Eva Liu

• For simplicity, Tag for the BOR signature at the same time you tag your clients

• When setting the signature order the BOR must be the LAST to sign.  The BOR will not sign until all other signatures are in place.

• The BOR will not sign until verification is received that we the deposit funds in the account.  Either forward with your request a copy of the Receipt you would have received from deals or request an email from Deals@HouseSigma.com that we did in fact receive the funds into the deposit trust account.    

• When all signatures are in place you must forward a copy of the fully executed Mutual Release along with the Agreement of Purchase and Sale to Deals@HouseSigma.com so that we can retain a copy of all documents for audit purposes.

Return of Deposit TimeLine

We can not guarantee a turnaround time but the Return of Deposit Cheque should be cut and mailed within 24-48 hrs

THERE IS NO PICK UP OPTION.  All Return of Deposits will go by Mail.

COMPLETING THE MUTUAL RELEASE

From time to time you are going to have a transaction that does not complete.  Either the conditions were not waived, or at some point between firming up the deal and closing one of the parties circumstance changed.

Here is what you need to know about filling out a mutual release.

No Deposit Received

Not only does it arrange for return of deposit... it RELEASES all parties from further claim.  

This is why even when there is no deposit received it it good practice to secure a mutual release

If there has been no deposit delivered you can Zero out the amount  under payable to "No Deposit Delivered None to be Returned"

Negotiated Return of Deposit

The deposit may not always be returned in full and it may not always go back to the buyer.

For instance to be released from a deal without further consequence a buyer and seller may negotiate to forfeit a portion of or all of the deposit.

In some very rare instances the Buyer and Seller may agree that a portion of the deposit may be used to compensate one or both of the realtors involved in the transaction

Who is the Return of Deposit Cheque Payable to?

The deposit may have been provided by a third party and therefor under "payable to" the name may be different from the buyer(s)

*important any 3rd party providing a deposit must be identified by fintrac... even if the deal is not complete*

Important to Remember:  If under payable you simple enter "The Buyer(s)" the brokerage holding the funds will make the cheque payable to the names as they appear on the agreement of purchase and sale.  ASK your clients how they want the return of deposit to be issued... not everyone has a joint bank account and a cheque made payable to both parties may be un-cashable.

USE THE CORRECT RELEASE

OREA has provided multiple versions of the release to apply to the type of transaction Purchase/Commercial/Lease/Assignment

Hint:  Form Numbers are grouped... ie. 100 residential, 400 Lease, 500 Commercial

Form 122:  Mutual Release:  Agreement of Purchase and Sale Residential

Form 152:  Mutual Release:  Agreement to Purchase and Sale Assignment

Form 402:  Mutual Release:  Agreement to Lease Residential

Form 539:  Mutual Release:  Agreement to Sublease Commercial

Form 572:  Mutual Release:  Agreement of Purchase and Sale Commercial

Form 582:  Mutual Release:  Agreement to Lease Commercial

EXAMPLE MUTUAL RELEASE

"Typical" Mutual Releases:

We, the Buyer and the Seller in the above noted transaction hereby acknowledge that the above described transaction is terminated and release each other and the Brokerage in the proposed transaction, from all liabilities, covenants, obligations, claims and sums of money arising out of the above Agreement of Purchase and Sale, together with any rights and causes of action that each party may have had against the other and/or the Brokerage, and we direct the deposit holder to disburse the deposit of: ............<INSERT FULL AMOUNT OF DEPOSIT>............... Canadian Dollars ($CDN).......<INSERT NUMERICAL FULL AMOUNT >............................... 

payable to: ...........<INSERT NAME OF BUYER, BUYERS OR 3RD PARTY..............................................................................................................................

(note some realtors will add "without interest or deduction" following the name of the payable to)

Remember, your circumstances may be different and you may have negotiated a partial return of deposit.  If this is the case check with your manager for direction.