本文发表在 rolia.net 枫下论坛When clients changes their mind after they have signed the contract.
Sometimes, after binding themselves to buy or sell Real Estate, clients change their minds. Often, they are under the mistaken impression that there are no repercussions to their not closing. Nothing could be farther from the truth. The following is a brief summary of the law in this area. This summary is not a substitute for proper legal advice and clients are well advised that by not closing they are entering the world of "breach of contract" litigation and as such should seek legal advice.
There is no "cooling off" period for resales. Once all conditions have been waived and the deposit moneys given, the deal is firm and binding.
There are two basic legal remedies involved in a situation of non-closing - namely an action for damages and an action for specific performance.
DAMAGES
The aggrieved party in a Real Estate transaction has the right to sue the wrongdoer for the monetary damages they suffer. If the aggrieved party is the purchaser (vendor will not close) they have a right to claim as against the vendor for their deposit back, plus all expenses related to the non closing including hotel expenses, moving and storage. If the market has risen in the time between the entering into of the contract and the notice of the non-closing, then the vendor may be liable to the purchaser for that increase in price of a similar residence. There is even some suggestion that the law may permit a claim for emotional distress relating to the contract breach.
If the aggrieved party is the vendor (purchaser will not close), they have a right to sue the purchaser for all the expenses they incur relating to the nonclosing, including carrying costs of the home (provided they make reasonable efforts to sell the home in a timely manner) from the time of the non- closing until the closing of the new sale. If the market has fallen in the time between the entering into of the original contract of sale and the date of the second sale, then the original purchaser is liable for that reduction in value. Similarly there is some exposure to the wrongdoer to an action for damages for mental distress relating to the failure of the purchaser to complete the transaction.
SPECIFIC PERFORMANCE
Specific performance is an action to force a party to a contract to abide by and complete the terms set out in that contract. In a Real Estate setting this means to force the parties to close. The Supreme Court of Canada ruled on this issue recently in the case of Semelhago V. Paramadevan, where the court held that specific performance is not to be granted automatically in all cases. In order to succeed in a claim for specific performance in a Real Estate context the party claiming has to prove to the court that the subject property is so unique that a substitute would not be readily available. If a substitute is available then the aggrieved party has to resort to an action for damages.
Recently, this test of "uniqueness" was defined in the Ontario Courts. In the case of Tropiano v. Stonevalley Estates, the purchaser persuaded the Court that the property in question was "unique". The Court found in that case that the purchaser "attached particular significance to the fact that the property in question was a ravine lot and the location of the lot was important to the (purchaser)"
Last year a study came out in Ontario that found the average civil litigation in our province cost each party approximately $35,000.00 The moral of the story is that sometimes changing ones mind (especially after one has obligated oneself to a Real Estate transaction) can be an expensive mistake!更多精彩文章及讨论，请光临枫下论坛 rolia.net
Sometimes, after binding themselves to buy or sell Real Estate, clients change their minds. Often, they are under the mistaken impression that there are no repercussions to their not closing. Nothing could be farther from the truth. The following is a brief summary of the law in this area. This summary is not a substitute for proper legal advice and clients are well advised that by not closing they are entering the world of "breach of contract" litigation and as such should seek legal advice.
There is no "cooling off" period for resales. Once all conditions have been waived and the deposit moneys given, the deal is firm and binding.
There are two basic legal remedies involved in a situation of non-closing - namely an action for damages and an action for specific performance.
DAMAGES
The aggrieved party in a Real Estate transaction has the right to sue the wrongdoer for the monetary damages they suffer. If the aggrieved party is the purchaser (vendor will not close) they have a right to claim as against the vendor for their deposit back, plus all expenses related to the non closing including hotel expenses, moving and storage. If the market has risen in the time between the entering into of the contract and the notice of the non-closing, then the vendor may be liable to the purchaser for that increase in price of a similar residence. There is even some suggestion that the law may permit a claim for emotional distress relating to the contract breach.
If the aggrieved party is the vendor (purchaser will not close), they have a right to sue the purchaser for all the expenses they incur relating to the nonclosing, including carrying costs of the home (provided they make reasonable efforts to sell the home in a timely manner) from the time of the non- closing until the closing of the new sale. If the market has fallen in the time between the entering into of the original contract of sale and the date of the second sale, then the original purchaser is liable for that reduction in value. Similarly there is some exposure to the wrongdoer to an action for damages for mental distress relating to the failure of the purchaser to complete the transaction.
SPECIFIC PERFORMANCE
Specific performance is an action to force a party to a contract to abide by and complete the terms set out in that contract. In a Real Estate setting this means to force the parties to close. The Supreme Court of Canada ruled on this issue recently in the case of Semelhago V. Paramadevan, where the court held that specific performance is not to be granted automatically in all cases. In order to succeed in a claim for specific performance in a Real Estate context the party claiming has to prove to the court that the subject property is so unique that a substitute would not be readily available. If a substitute is available then the aggrieved party has to resort to an action for damages.
Recently, this test of "uniqueness" was defined in the Ontario Courts. In the case of Tropiano v. Stonevalley Estates, the purchaser persuaded the Court that the property in question was "unique". The Court found in that case that the purchaser "attached particular significance to the fact that the property in question was a ravine lot and the location of the lot was important to the (purchaser)"
Last year a study came out in Ontario that found the average civil litigation in our province cost each party approximately $35,000.00 The moral of the story is that sometimes changing ones mind (especially after one has obligated oneself to a Real Estate transaction) can be an expensive mistake!更多精彩文章及讨论，请光临枫下论坛 rolia.net