When your dream home purchase turns into a nightmare
In Ontario, when you buy a home or condominium, you sign a contract called an Agreement of Purchase and Sale. Most of the time, the buyer also puts down a deposit which is a percentage of the property value. It is legally binding and getting out of it has financial consequences.
Cooling off period protects some pre-construction buyers
When you buy a pre-construction condominium directly from the builder, you go through the same process, but you have 10 days to cancel the agreement. This is called a “cooling off period.” Under the Consumer Protection Act, a cooling–off period is a period of time following a purchase when the buyer may choose to cancel, for any reason, and get a full refund of their deposit. However, with other real estate purchases, such as pre-construction freehold homes, and resale homes and condominiums, there is no cooling off period. Once you sign that contract, the buyer and seller are legally bound to fulfill their obligations under the contract.
Conditions can help protect buyers of resale property
Buyers of resale homes and condos are able to build in conditions on the sale. These conditions can include that the buyer obtain financing, a satisfactory home inspection, or even that they sell their own home or condo first. In these situations, the Agreement of Purchase and Sale is not a firm contract because conditions must first be met. If any of these conditions are not fulfilled, the Agreement ends and the deal falls through. The seller must return the deposit to the buyer, and they each walk away.
When home buyer’s remorse strikes
If you’ve changed your mind about the purchase, simply stating that one of the conditions was not satisfied just to get out of the Agreement may not be enough. Sometimes, the seller will require evidence that you were not approved for financing, or that the inspection found significant deficiencies with the property.
And what if you didn’t build in these conditions in the first place? Perhaps you were in a multiple-bid situation, and felt you had to make your offer as attractive as possible. Or maybe you waived the conditions, and now you’ve changed your mind and don’t want to buy the property anymore?
Without a cooling off period or conditions, the Agreement of Purchase and Sale is fully enforceable by the seller. Home buyer’s remorse can feel like you’re trapped. There’s a lot on the line, including your deposit. It’s also possible that the seller could take legal action against you to recoup damages caused when you backed out of the deal.
Geraldine Acosta can help you navigate this situation and plan a course of action. She can work on your behalf with builders and sellers to help you. Geraldine is an experienced and knowledgeable Civil Litigation lawyer. She has vast experience in dealing with contract disputes and real estate litigation.
Book your free 30-minute consultation with Geraldine at 905-448-1105. Evening and weekend appointments are available upon request.