Agreement of Purchase and Sale

Duty of Honesty and Good Faith in Performance of an Agreement of Purchase and Sale

In an earlier article I discussed the duty of good faith in the formation and performance of resale residential agreements of purchase and sale with particular focus on a buyer relying on his conditions to terminate an agreement. Typical conditions include the buyer arranging financing and/or insurance, and performing a home inspection, all of which conditions usually provide that the buyer may rely on such condition in his sole and absolute discretion.  In a recent decision the Supreme Court of Canada has ruled that there is a general duty of honest contractual performance in every contract. “This means simply that parties must not lie or otherwise knowingly mislead each other about matters directly linked to the performance of the contract. … Read More

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Rented vs leased fixtures and how it can affect your home purchase

When preparing a listing agreement or an Agreement of Purchase and Sale a real estate agent must ensure that rental items (for instance, a hot water tank and heater, water softener, furnace or air-conditioner) are in fact true rentals and not the subject matter of a lease or other agreement which includes an obligation, as opposed to an option to purchase the piece of equipment.  The agent should ask his client or the other agent for evidence that it’s a true rental agreement. A useful starting point is the seller’s Enbridge bill which may disclose rental amounts being paid to Direct Energy or other lessors/sellers of equipment.  Unless the Enbridge bill clearly discloses the payment to be a true rental, … Read More

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HST Rebate – New Home/Condominium Purchased From Builders

HST REBATE  – New Home/Condominium purchased from Builders (not resales and not commercial properties) It is always important to review and understand your Agreement of Purchase and Sale. Unless it otherwise provides, if you entered into an Agreement of Purchase and Sale after June 18, 2009, and which in fact closes on or after July 1, 2010, you will be responsible for the HST, net of the GST/HST rebate, if any, if you qualify. If you (and others, all being individuals) are purchasing a newly constructed home or condominium unit from a builder with the intent that it will be occupied as your and their primary place of residence, or the primary place of residence of your or their “relation” (being limited … Read More

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Can you Evict your Tenant When Selling your Property?

I am often asked by sellers of their principal residences and investment properties if they can evict their tenants and provide vacant possession of the property to the buyer. Section 49 of the Residential Tenancies Act permits a landlord/seller, in certain circumstances, who has entered into an Agreement of Purchase and Sale to, on behalf of his purchaser, terminate the tenancy provided that the purchaser in good faith requires possession of the property for residential occupation by himself, his spouse, a child or parent of the purchaser or the purchaser’s spouse or a caregiver. The date of termination specified in the Notice of Termination must be at least 60 days after the notice is given and, generally speaking, on the … Read More

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Common Pitfalls of Flipping New Condominium Home Agreement Assignments

New Home Agreement Assignments

In my earlier blog, I discussed the importance of determining whether you need your builder’s consent to assign/flip your agreement of purchase and sale. Usually you do. Once you have resolved that issue, you will enter into an agreement of purchase and sale with your purchaser regarding the flip. In that flip agreement, your purchaser will require your written assurances that you have the right to flip your agreement, that your deposits are paid in full to date and that you are not otherwise in default under your agreement of purchase and sale with your builder. A prudent assignee will not accept your word alone regarding the status of your agreement of purchase and sale with your builder and, as … Read More

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Consider This When Flipping Your New Condo in Toronto

When I am asked by a client if they can flip their new condominium/new home agreement of purchase and sale, I always respond that the first place to start is the agreement of purchase and sale itself. Unless the agreement of purchase and sale prohibits flips, then the purchaser is free to flip their agreement of purchase and sale. However, in my experience no builder’s agreement permits assignments without the builder’s consent. Sometimes the builder cannot unreasonably withhold their consent and sometimes the builder can arbitrarily withhold their consent.  Typically, builders charge a fee in order to obtain their consent to assign and it’s important to remember that even if the builder consents to your flipping of your agreement, the … Read More

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The importance of a lawyer’s review of an Agreement of Purchase & Sale

An Agreement of Purchase and Sale, once signed, and once all of the conditions (for example, financing and home inspection) have been waived or fulfilled is a binding contract between the buyer and seller which cannot be changed unless both parties agree to do so. Usually, if one party wants a change to the Agreement, it is to benefit that party, to the detriment of the other, in which event the other party will not agree. Many people believe that conditions (for example, financing and home inspection) are   absolute “escape” clauses allowing the buyer to terminate the Agreement of Purchase and Sale for any reason (including “buyer’s remorse”), but this is not the case. A financing condition allows a buyer … Read More

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