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Entries posted May 2021

Courts have no empathy for failed Buyers:

As you know, pressures on home buyers have intensified. “Clean” offers without conditions, have become the norm. In many cases though, unconditional offers are poor choices: they often result in purchasers being unable to close in time. Buyers should tread with caution and strive to put contingency plans in place if financing or the sale of their existing home falls through. Failing to close may lead for more than the shortfall in purchase price. Recoverable damages embrace all reasonable costs incurred by vendors in dealing with the breach and mitigating their losses. These include carrying costs, maintenance outlays, property tax, realty commissions, legal fees, as well as staging and other reasonable expenses. This is in line with the basic legal concept that courts should restore vendors to the position they would have enjoyed had the purchaser not breached the contract. In some cases, buyers cite falling markets, offering to close for less than the original price to which the parties agreed. If the vendor refuses the lower offer, the buyer may try to allege a failure to mitigate. But courts have consistently ruled that vendors have no duty to mitigate until after the purchaser’s breach of contract. This suggest that vendors can ignore revised offers. Most agreements of purchase and sale (including the standard OREA form) include a “time is of the essence” clause, meaning that parties must respect the deadlines in the contract. Courts have repeatedly enforced these terms, with the goal of maintaining certainty and predictability in our property transfer system. Our market is unpredictable, still it seems that we have reach a ceiling in April. I am staying positive, as I am not expecting a bad market, the market should stay strong, but the multiple offer situation is smoothing, depending of your neighbourhood it might be a good idea to sell first at this stage.

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