News

A recent listing in Toronto is offering a 25% interest in a home, being one storey in a three story house. This apparently is being done in Montreal and San Francisco. Please read the attached article, where I am quoted as to why I believe that this will be difficult to achieve. Besides the issues about repair costs and the fair splitting of property tax and utility bills, it will be extremely difficult for a buyer to get financing for this type of purchase.

I am often asked what a seller is obligated to disclose to a future buyer if a prior buyer did not purchase because of a negative home inspection report? This raises many interesting issues, starting with the fact that a buyer is not obligated to share any home inspection report with a seller, unless it says so in the home inspection condition. But what if a buyer tells a seller about a major potential defect? Can the seller just fix the problem and say nothing further. Should the seller do further due diligence? And what duties does a real estate agent have if they know about the problem as well.

I am often asked whether a seller is required to disclose damages to a home that occur just before closing, or can they just repair the problem and say nothing. Please see the attached decision about what happened when a basement flooded before closing and the seller chose to fix it without saying anything to the buyer. The basement flooded again after closing and the buyer was able to recover their repair costs. In my opinion, it is best to disclose damages that occur prior to closing, make sure that they are properly repaired and provide the buyer with the opportunity to conduct their own inspection.

Toronto is now considering raising development charges on new condominium units. This means that buyers of new condominium units over the past few years may have to pay these additional charges on closing, unless they had protected themselves with a cap on expenses when they signed the agreement in the first place. If you are acting on an assignment of a new condominium agreement, you must also be very careful to remember that the new buyer will become responsible for these obligations unless they are properly protected in the assignment agreement.

Lenders are more frequently asking for an appraisal of a property just prior to closing. If the appraisal is less than what the buyer paid for it, then the lender may either reduce the amount of the mortgage loan or just cancel the loan altogether. Just because you are pre-approved for a mortgage does not mean you will get the full amount. Make sure that your lender has completed its appraisal before you waive any financing condition.

When you sell a home that has been in the family for many years, it can be very emotional for everyone involved. It becomes even more difficult if the buyer plans on demolishing the home. Please read the attached case to see what happened when a seller changed their mind about the sale of their parent’s home after learning that the home was to be completely gutted after closing.