real estate law

Here Today, Gone Tomorrow – The Risk of No Conditions!

Cheri 0 Comments

Sold

In this very hot market, we are seeing most deals without any conditions, and in particular, no financing condition.  However, this is not necessarily a blessing for the Seller. Sales not being completed because of the Buyer cannot get financing.  The Seller believes they have a firm Agreement of Purchase and Sale act upon that information to buy a new home. Unfortunately, the Seller finds out when they get close to the closing, that the Buyer cannot close because the price paid for the house is not justified by the bank’s appraisal.  The Seller is left in the inevitable position of not being able to complete their purchase.

To make matters worse, there was a multiple offer, and unfortunately the seller selected the perceived best offer, which turned out to be the wrong offer.  The offer had only the minimal deposit, so the seller does not have much to fall back on for their damages.

In order for Agents acting for the sellers to protect their clients, the Agents should be making sure that the accepted Agreement of Purchase and Sale have larger deposits.  If buyers can not come up with a larger deposit, they probably cannot make up any shortfall in the bank financing either.

If you sold your home in 2016, you will have to report it to the Canadian Revenue Agency in your tax form that deals with Capital Gains, even though any gains remain tax free if you have lived in the house as long as you owned it. The basic information related to the transaction must be filled out on the income tax form including the year of purchase, the proceeds of the sale, and the description of the property.  The penalty for not reporting the sale of a home and not having your tax return amended if necessary is up to $8000. This change in reporting will make it easier for the CRA to catch taxpayers who try to claim the principle residence exemption on more than one property for the same period.

Knowledge is Power, which results in more business!

If you have any questions or concerns, please feel free to contact us at your convenience.  If you have any suggestions for future topics please let us know.

Prepared by Don Travers, Solicitor with Paquette & Travers

Contact toll free: 1-877-744-2281    Online: www.paquettetravers.com

Watch for more Travers Tidbits to follow each month!

Buyer Beware! How to Avoid Being Trapped by Misrepresentation

Don 0 Comments

house in mousetrap. Isolated 3D image

Remedies for Misrepresentation before Closing

Rescission (termination) is available where a material misrepresentation in the Agreement of Purchase and Sale was an inducement to the Purchaser to enter into the Agreement is established. This misrepresentation must be material and must have served as an inducement to enter into the Agreement of Purchase and Sale.

A representation which amounts to a statement of opinion, probability, expectation or exaggeration goes for nothing and although the statement may not be true, a Purchaser is not justified in placing reliance on it. Such statements have no legal significance and would not enable the Purchaser to terminate the Agreement.

Representation can be classified as an innocent misrepresentation, a negligent misrepresentation, or a fraudulent misrepresentation. A Purchaser is entitled to terminate the Agreement if the representation is material and in the Agreement, whether it is innocent, negligent, or a fraudulent misrepresentation. A misrepresentation is fraudulent when the Seller makes a false statement of fact knowing it is false, or recklessly, without caring whether it is true or false, intends to induce the Purchaser to enter into the Agreement and the Purchaser relies on it.

The “entire Agreement clause,” paragraph 26 in the standard form, will protect the Seller from an innocent misrepresentation made outside the Agreement. However, that clause will not protect a Seller for a fraudulent misrepresentation made by the Seller or the real estate agent outside the contract.

Whether the clause excludes negligent misrepresentation made by a Seller or agent and not included in the Agreement is unclear. In the case of Hayward v Mellick, a statement by the Seller’s agent described a farm contacting 65 workable acreage when in fact it was only 51. The Court of Appeal said that a negligent misrepresentation not included in the Agreement could not be relied upon by the Purchaser because it was excluded by the entire Agreement clause. However, in a subsequent case, Bear v Townsgate 1 United, casts doubt on whether the clause excludes pre-Agreement negligent misrepresentations.

Faced with a decision to close or not close, the lawyer must depend on how a court classifies the misrepresentation made by the Seller. Unfortunately, the distinctions between each class of misrepresentation is often tenuous.

If the statement in the Agreement is labelled a warranty and that statement is not true, even if discovered before closing, it does not give the Purchaser the right to terminate the Agreement. It only gives the Purchaser the right to sue for damages after closing.

If the misrepresentation is an innocent misrepresentation, and the Purchaser decides to close, the Purchaser must be made aware that they will not be able to sue for damages after closing.

Unfortunately, there is not always certainty in the law.

Knowledge is Power, which results in more business!

If you have any questions or concerns, please feel free to contact us at your convenience.  If you have any suggestions for future topics please let us know.

Prepared by Don Travers, Solicitor with Paquette & Travers Professional Corporation

Contact toll free: 1-877-744-2281                                                             Online:www.paquettetravers.com

Watch for more Travers Tidbits to follow!

 

5 Reasons to Fall In Love with Paquette Travers !

Don 0 Comments

February is the month of love, so we thought we’d give you the 5 top reasons to fall for our people and services.  Drumroll please…

  1. We Guarantee Our Fee.  If you are not satisfied with our service, we will refund our legal fee.

  2. 45 Years Experience with Don Travers and Rinus Pais combined.  We’ll leave it to you to guess their ages!

  3. Exceptional Aftercare.   We provide all the follow up correspondence to realtors, lawyers, banking institutions and more.

  4. Five Locations To Serve You Best - Cambridge, Milton, Guelph, Kitchener, Waterloo.  We’re everywhere in the Tri-Cities and beyond.

  5. No Charge for Reviewing Agreement of Purchase and Sales or Status Certificates.

So why not give us a call today or drop us an email to set up a consultation to chat.  We’re looking forward to meeting you!  Email: info@paquettetravers.com or Call us at 1-877-744-2281.