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When you hide something from your buyers, chances are you are going to have to pay for it after closing, as well as paying lawyers. And don’t expect your home insurance to cover your legal fees. Please see the attached case about a seller who tried to hide the fact that there was a prior fire on the property from a buyer. Insurance companies will not protect you if you deliberately mislead a buyer.

As a result of further restrictions announced by CMHC, it may be time for sellers to consider offering a seller take back mortgage as a means to entice more potential buyers to their property. It can also lead to tax savings for the seller if they are selling an investment property, However, as the attached article indicates, seller financing is not for everyone and the terms must be clearly specified in any agreement of purchase and sale.

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.