Falling Through on an Unconditional Sale

During the course of a property being sold, there is, or certainly should be a contract.  This sets out the responsibilities of the buyer and the seller.  It also lists any conditions that must be met for the sale to be legitimate.  For instance, a contingency that the potential buyer’s home must sell before this sale can go through.  Or, the seller must make certain repairs or improvements and be inspected before the deal is done. 

If there is a great deal of interest in the property or the buyer is simply intent on having this particular piece of real estate, the contract can be written as “unconditional”.  This means there are no requirements that need to be met, and the buyer will sign the document knowing that they are a shoo-in for the deal.

Exploring the Consequences  

In mid-March of this year, there was a lawsuit that hit the Ontario Supreme Court of Justice (Kisliuk v Algai,2023 ONSC 1841).  In this case, a $75,000 deposit on the purchase of a $1,960,000 piece of property.  A contract was signed, and the closing date was set.  The seller requested an extension on the closing and agreed to pay $1,847 as a fee to get the extension, but the seller never came up with the money.  However, the seller was ready for the sale on the designated closing date, but the buyer did not complete the purchase.

The seller put the property back on the market but by that time, the market had dropped and the real estate sold for only $1,800,000.  The seller thought they were entitled to the difference between the original price and the actual selling amount plus the additional charges that accumulated during the relisting and sued.

The Court agreed and awarded the seller the $160,000 difference, plus the amounts paid for the additional insurance, mortgage interest payment, real estate taxes, staging expenses for the relisting, and even more.

The point to remember is that once a contract is signed, the parties are bound unless it is amended or modified in writing.  Very little about a contract can be illegal.  As long as the parties are of age and sound mental condition, it is a deal.  Failing to read the document is not an out.  It is assumed that, as the buyer, you will understand what you are getting into when you say there are no conditions applicable to this business deal. 

Making Informed Decisions

As you can tell from this new ruling, you need to consider all potential purchases and their repercussions before putting your name on the dotted line.  It is best if you have your own representative along to answer your questions or explain matters so that you don’t get yourself into a deal that will cost more than you planned.  One of the key factors is to have your financing all in line.  One of the best places to start for that is to contact easyhouseloan.ca.  They have access to a wide range of investors who are willing to finance real estate purchases and fund mortgages.  They also have experts who can provide the most up-to-date information about the real estate market.