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Tag: buyer

The Holdover Period, Real Estate Commissions and Listing Agreements

Sellers should be weary and concerned with agreeing to a holdover period as defined in a typical listing agreement to offer to sell a property.  The same can be said about Realtors (real estate sales representatives, brokers and brokerages) who take over a listing immediately upon its expiry or termination, that was previously listed with a different Realtor.  For illustrative purposes a typical commission and holdover clause found in the Ontario Real Estate Association (“OREA”) listing agreement available for the Toronto Real Estate Board (“TREB”) members is as follows:”COMMISSION: In consideration of the Listing Brokerage listing the Property, the Seller agrees to pay the Listing Brokerage a commission of……% of the sale price of the Property or…for any valid offer to purchase the Property from any source whatsoever obtained during the Listing Period and on the terms and conditions set out in this Agreement OR such other terms and conditions as the Seller may accept.  The Seller further agrees to pay such commission as calculated above if an agreement to purchase is agreed to or accepted by the Seller or anyone on the

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Real Estate law: Can You Refuse to Close if Your Condominium Square Footage is Less Than You Bargained For?

In real estate law, representations are very important elements to any agreement of purchase and sale.  Typically the party selling the property will represent things such as the size of the land, the size of the dwelling, that the chattels and fixtures included in the purchase price are free and clear of encumbrances and in working order, etc.  In law, a representation is defined as a statement of past or present fact without the statement necessarily also being a promise, although the law has recognized that a representation can be both a promise and a representation.  While the topic of representations in contracts is extremely comprehensive, 756289 Ontario Limited et al. v. Milan Harminc, (1998) CarswellOnt 1577, 98 G.T.C. 6206 (“Harminc”) is one example of where a representation affected a real estate transactions with respect to the representation of square footage.Harminc is a case wherein a buyer purchased a commercial condominium property from a builder.  The buyer refused to close and the builder sued the buyer for breach of contract and sought damages.  While the defendant buyer advanced a number of arguments for his defence, the case turned on whether the builder misrepresented to the buyer the square footage of the property and if so, whether that misrepresentation was material enough to entitle the buyer to rescind the contract and refuse to close.

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More Provisions in the Real Estate Agreement of Purchase and Sale

Spousal consentWhen selling a matrimonial home like a principal residence or cottage, it is always necessary to have the non-title holding spouse consent to the sale.  For the purposes of real property, the term “spouse”, is defined as a married spouse and matrimonial home is as defined in the Ontario Family Law Act (R.S.O. 1990), therefore the term spouse does not contemplate common-law spouses in this situation.  The provisions in the Agreement serves as a warranty, the Seller is warranting that the property is being sold in accordance to the Family Law Act by ensuring that both spouses are consenting to the disposition of a matrimonial home.Urea Formaldehyde Foam Insulation Warranty (“UFFI”)

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Understanding the Deposit in a Real Estate Transaction

The depositA deposit on a real estate transaction is regarded as consideration by the buyer to the seller to sell their property at a future date.  If a deposit is not given upon acceptance or with delivery of an accepted offer, the agreement will not be binding.  Therefore it is imperative that a buyer delivers the deposit in order to secure the transaction.  The amount of deposit is generally negotiated between the buyer and seller.  The seller will try to get the largest deposit possible to deter the buyer from default and conversely the buyer will want to provide a smaller one in case they default.  The rule of thumb on a typical transaction is  five percent (5%) up front however often buyers can negotiate deposits to be paid in installments or upon waiving certain conditions.The Ontario Real Estate Association standard form agreement of purchase and sale (OREA Agreement) gives two options regarding the timing of deposits. While the first is to have the deposit presented with the offer, the second is to have the deposit paid upon acceptance.

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REAL ESTATE: Latent & Patent Defects when purchasing a home. Need a home inspection?

Latent defects in the eyes of the law applicable at the time when administering the sale of a real estate property (land, buildings and fixtures or chattels), are faults or shortcomings in the property not ordinarily found even though the inspection was reasonably thorough. For instance, there could be a disused underground fuel tank in the property, its filling line, vent, etc. removed or gone. It would be very difficult

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