May 2nd - 2015

Legal Beat: Saturday closing leads to lawsuit

A closing that was scheduled for a Saturday in an agreement of purchase and sale (APS) led to legal issues in an Ontario property transaction.

Legal Beat

A closing that was scheduled for a Saturday in an agreement of purchase and sale (APS) led to legal issues in an Ontario property transaction.

Legal Beat

by Merv Burgard, Q.C

A closing date in an APS for a $2.9 million property was set for a Saturday -- but real estate registrations cannot occur on a Saturday in Ontario.

Neither party was ready, willing or able to close on that Saturday or on the following Monday.

The buyers then repudiated the contract; the sellers restored the time of the essence by setting a new closing date and tendering properly on that date. The sellers resold for $3.25 million.

The courts held that the buyers' $75,000 deposit could be retained by the sellers.  

Varajao v Azish 2015 ONCA 218

Mervin Burgard Q.C.

MERV’S COMMENTS

Even though the sellers managed in the end to sell the property for a higher amount and did not suffer any damages, it was reasonable (and, as the judge said, not unconscionable) for them to keep the forfeited deposit. It is a proportionate amount of a deposit under the circumstances of these facts, based on the purchase price.

A Saturday closing date??!!  As every lawyer and REALTOR® in Ontario is taught, a real estate registration only occurs when the registry system is open. That cannot be a Saturday, Sunday or statutory holiday.

Mervin Burgard, Q.C.


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