FAQ: Real Estate
Question: Should I have a lawyer review the Agreement of Purchase and Sale before I sign it and how much will this cost me if I have a proposed Agreement reviewed each time but only conclude a binding Agreement say, following five or more offers?
Answer: To answer in reverse order, consider that whether you are a Purchaser or a Vendor, the Agreement of Purchase and Sale can be revised by your lawyer just the one time in order to ensure that all of the necessary provisions are included. Thereafter, it is more a matter of making certain that all future offers contain the same provisions and, when in doubt, your lawyer should be always be consulted. The answer to the first part of the question is accordingly Yes. Having a lawyer review an offer to buy or sell will provide far greater protection and service to the client than providing an executed Agreement which, for the most part, cannot be changed after the fact. Where reviewing and revising an offer are concerned, our office makes it a policy of not billing more than the flat fee charged for closing the real estate transaction.
Question: I entered into an Agreement to purchase a property for which I do not want to close now that another, more desirable property has become available. Can I enter into an Agreement to buy the second property and be released from closing the first?
Answer: An Agreement of Purchase and Sale is a legally binding contract enforceable before an Ontario Court of competent jurisdiction. The Agreement is furthermore enforceable, both pursuant to its terms and the Common Law. It therefore stands that entering into an Agreement to Purchase to buy the more desirable property should only be done if and when a proper release has been given from the Vendor of the first property, unless of course you are able and willing to conclude both Agreements and carry both properties – and all costs associated with doing so – until selling the least desired of the two. Typically, a release will not be granted with any ease meaning additional expense on account of legal fees and, even if granted, will likely not release you from potential losses suffered by the Vendor resulting from an eventual sale of the property for less money than you yourself originally contract to pay. For these reasons, an Agreement of Purchase and Sale should only be entered into in the instance that the contracting parties have every intention of carrying out their respective obligations thereunder which includes, of course, concluding the transaction.
Question: I want to sell my house to a (member of my family, friend, work colleague, etc…) and want to save on commission. Is it a requirement that I list the sale of my house with a real estate agent?
Answer: No. You are not legally required to list your house or even market its sale in any way in order to enter into an Agreement to sell it no matter to whom. What is needed, however, in order to comply with the Statute of Frauds is an Agreement in writing evidencing the contract between Buyer and Seller. Any lawyer in good standing with the Law Society can draft an Agreement of Purchase and Sale and then send it off for review by the lawyer acting for the other party prior to two sides executing the Agreement. That said, not listing on the Multiple Listing Service with a Real Estate Agent may mean not obtaining the best price for the property. Some advice should, at the very least, be obtained or some research done in order to ensure that the sale price represents fair market value. Another approach may entail negotiating with your agent regarding the commission rate charged by him or her.
Question: I am currently in a Listing Agreement contract with my realtor but want to sell my house privately to a couple that has approached me and even offered a large deposit payable to my lawyer in trust. Can I sell to the couple and avoid paying commission to my agent?
Answer: A Listing Agreement is a legally binding contract fully enforceable by the Broker of Record in whose favour it is drafted. The terms of a Listing Agreement are typically such that a sale during the term of the contract or during the holdover period thereafter will entitle the listing agent to commission at the rate stipulated in the contract. As such, only a full release from the contract or termination of the contract, together with expiry of the holdover period thereafter, will allow a private sale to be concluded without liability to the listing agent for commission owing.
Question: My next door neighbour and I have a shared driveway which gives me a right of way over one foot of his property while granting him a right of way over two feet of my property. Since we do not drive our cars in and out of the driveway and therefore never really cross over to each other’s side I would like to erect a fence within the limits of my property in order to provide a more private atmosphere. Would such a fence be legal?
Answer: No. It is categorically illegal to interfere with an easement over land. The easement or right of way is deeded or registered on title and is therefore protected and fully enforceable unless and until such right of way is removed from title by a court of competent jurisdiction.