December 8th - 2008

LEGALBEAT: Sellers should move out when deal closes

The typical Ontario Agreement of Purchase and Sale provides that, "Upon completion, vacant possession of the property shall be given to the buyer...".

The typical Ontario Agreement of Purchase and Sale provides that, "Upon completion, vacant possession of the property shall be given to the buyer...". In this case, the buyers were moving from Toronto to London and arranged for movers for the closing date. They arranged for their London closing to happen at 3:09 p.m. and their sellers closed their own purchase at 4:24 p.m. on the same day.
 
The buyers' movers arrived at the London home at 6:00 p.m. but the sellers would not permit them access. The movers waited until around 9:00 p.m. but then left as their truck was needed in Toronto the next day. The movers returned the following Monday and billed the buyers an extra $1,393.91. The buyers incurred hotel and extra expenses totalling $401.55 and they sued the sellers for their losses.
 
The judge ordered these sellers to pay. She held that sellers are required to give vacant possession to their buyers on completion, and that means the closing of the transaction. If they do not, they are liable for any loss.

Foord v. Smith 33 RPR(2d) 279

MERV'S COMMENTS
This case stands for the proposition that if the deal is closed and the buyers are the owners they are entitled to move in. If the sellers want to delay the closing, the contract should specifically say so. The judge also said, "It is often that parties are moving in as others are moving out, and most of the time this is done in a co-operative spirit which recognizes the problems inherent in moving in and moving out, along with the timing of transactions at the registry office." The practical realities are that keys and monies change hands usually between 9:30 and 4:30 and reasonable people make sensible arrangements with each other. If it were otherwise the system would never function at all. Of course, cautious buyers could always arrange for an overnight loan and stagger their closing dates and make their lives simpler, although somewhat costlier.
 
Hopefully, REALTORS® and lawyers representing sellers will bring this to their attention.

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Jean-Adrien Delicano

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Ontario Real Estate Association
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