Want to avoid problems in your next real estate deal? Here are the top 10 issues in my experience that can lead to disappointment, unnecessary expense and even litigation in real estate agreements, in no particular order:
Wrong unit
I frequently see residential purchase offers where the wrong condominium unit is bought and sold. In many condominium buildings, the numbers on unit doors do not correspond with the registered unit and level number. For example, suite 1407 may be registered as level 13 unit 8.
Buyers should always insist on proof of the registered numbers at the time the offer is signed and not after the status certificate is delivered.
Status certificate
Another common error is buying a condominium unit without a condition on reviewing the status certificate. Not reviewing a current-dated status certificate can be both risky and expensive.
Vacant home tax
If the owner of a Toronto home or condominium unit has not filed a vacant home tax declaration the buyer could be subject to a penalty of three per cent of the assessed value. A surprising percentage of offers that I see are missing a requirement for the seller to provide proof that the declaration has been filed.
Commercial HST
Another error that occurs far too often is on agreements for a commercial property — where HST is intended to be in addition to the purchase price — being written on a residential form — where HST is included in the price.
I have also seen agreements for co-operative or co-ownership units signed on a condominium form. This is looking for trouble.
Furnaces, etc.
Sellers need to be very careful about whether their furnace, AC unit and hot water tank are owned or rented. Too many sellers have inadvertently listed them as being included in the purchase price and wound up having to buy out the lease.
Land survey
The most important document in any freehold transaction is a land survey — whether current or historical. Many legacy surveys are accessible online at protectyourboundaries.ca. If they are available, surveys should always be made part of the transaction.
Closing date
Too often closing dates are set for weekends or holidays when banks and the land registration system are closed — like Family Day this year, which is Feb. 17. Closing at month-end is also risky due to bank delays in wiring funds. Check your calendar before signing.
Buying an estate property
Buying property from the estate of a deceased person? This requires a sophisticated postponement clause providing for the possibility of a delay if the estate trustees do not receive probate from the estates court in time for the anticipated closing. Some courts are backed up as much as nine months or more in processing probate applications.
Cottage and waterfront properties
Offers for cottage and waterfront properties require special clauses dealing with issues like building permits, septic permits, registered road access, shore road allowances, clean bacteriological tests for water quality, well driller’s certificates for water quantity, fireplace inspections, building permits, and boathouses and docks.
If you want to avoid these issues and more, there is no substitute for legal advice before you sign on the dotted line.
