Buying a resale home can seem like a great deal. Axess Law suggests you look under the hood. You could be getting a lemon — unless you make your next real estate purchase subject to a home inspection clause Ontario.
While you may feel pressured to make an offer, especially if there are multiple bids, what you don’t know could cost you. Home repairs, especially extensive ones, are time consuming and expensive.
Mortgaging a Damaged Property
Your ability to get a mortgage is affected by a resale home’s condition. Mortgage lenders expect homes and condos to last around 60 years before they need major repairs — other than obvious wear and tear like replacing the hot water tank, heat pump or a worn-out roof. You could be forced to take a shorter amortization period or make a larger down payment if your lender’s home appraisal uncovers major issues.
Why You Need Subject-tos
A SPIS (seller property information statement) may not be enough to protect you or the seller. Writing conditions into your agreement of purchase and sale gives you an out if a home inspection goes poorly.
Anything a reasonable property buyer or home inspector could easily find while touring a property (seeing cracks in walls? tested the aging appliances, but they don’t work?) are your responsibility to point out. Unless you ask the seller to repair them or reduce the price so you can, you’re stuck with the cost and inconvenience. As long as they don’t conceal their presence, sellers are under no obligation to disclose patent defects in a SPIS. Read this before you make a firm offer on real estate.
Major defects you likely couldn’t have found may be the seller’s fault. Courts don’t expect buyers to remove wallboard to look for water leaks or faulty wiring. Unless they genuinely did not know about it, sellers are legally required to disclose latent defects only a professional would have recognized.
Axess Law explains real estate law when you have doubts that you are being diligent enough in making a property offer. We discuss how to handle latent defects the seller discloses and what to do if they don’t. Our licensed real estate lawyers in Toronto or Ottawa examine your agreement of purchase and sale to advise if you can get out of a property purchase or sale gone wrong.
Fixing Pre- or Post-Possession Home Problems
Encroachments, easements or legal non-conforming — the language in a SPIS can be confusing or intimidating. Not doing your own investigation into issues that affect the future use or sale of a property is not the seller’s fault.
But patent defects that make a property unfit, dangerous or potentially dangerous in future could be grounds to withdraw your offer. Sellers and buyers must agree to return deposits. A skilled Axess Law real estate lawyer can contact the seller’s lawyer for you and negotiate a resolution. If the deal has gone through and you only start having problems months or years later, we can review your legal situation and refer you to trusted legal partners for advice.
You may be able to use a mediator, dispute resolution tribunal or small claims court to argue your case to have the seller compensate you for expensive problems they knew or should have known about.
Negligent Realtor Remedies
Ontario realtors can be joined in legal actions if you sue a seller who declined to complete a SPIS or deliberately misled you. Realtors are obligated by OREA (Ontario Real Estate Association) to reveal material facts about homes for sale.
They and sellers, on the other hand, may not be liable for patent defects. The onus is on you to do your own investigation. Once you make an accepted offer, you are bound by the contract’s terms and conditions. But hiding latent defects the seller told the realtor about, like serious foundation problems or a leaky roof, can be actionable in court.
Failing to mention heritage restrictions that affect your mortgage or aluminium wiring behind wall cavities that prevents you from getting fire insurance can also set a realtor back legally.
Axess Law recommends getting independent legal advice if you are concerned about going through with a sale. Realtors aren’t lawyers, but lawyers can help pursue realtors who do you wrong.
Get What You Pay For
Fortunately, homeowner’s insurance covers many sins, like washing machine disasters before you take possession, sewer backup during spring runoff or overland flooding from unexpectedly heavy rains.
Provided the seller took good care of their home, insurers will compensate most damages. For example, insurers expect homeowners will:
- check and repair leaky faucets
- caulk windows and doors
- inspect roofs and foundations
- remove debris and ice dams from gutters
- clean filters and drain hoses
- check smoke and carbon monoxide filters
- replace batteries as needed
- or even install a backwater valve to prevent backup.
Ask the seller’s realtor about their home fire insurance or overland water coverage if you’re buying a house in a flood zone.
Who Pays Repairs
The seller can use their homeowner’s insurance to fix damages before you take possession. Or they might offer to reduce the price so you can finance repairs. Always check with your mortgage lender before going through with purchase of a damaged home.
Why You Need a Lawyer
Axess Law can review your purchase and sale agreement and advise on revising offers to purchase to protect your legal and financial interests. If latent or patent defects are discovered after you sign a legally binding contract, we write sellers asking them to fix the problem..
We confirm if a real estate deal falls through who gets the deposit or refer you to trusted legal partners for advice on going to court. If you’re the seller, our licensed real estate lawyers (Toronto area and Ottawa) tell you who gets deposits when a buyer backs out.
Our qualified real estate attorneys charge just $799 and up to sell your home or $999 and up to close a real estate purchase. We give independent legal opinions for Ontario if your home purchase or sale goes wrong ($349.99). Axess Law can help clear contractor liens preventing a purchase from closing and fixes land titles errors when we transfer the title to your property.
Online or In Person Flat Fee Legal Services Axess Law has virtual lawyers or can meet at any of our Toronto law offices near you or in Ottawa. Get legal advice from a real estate lawyer 7 days a week, day or evening, at times that fit your schedule. Book online — it just takes minutes — or dial our 1-647-479-0118 lawyer line to make an appointment. Call toll free to 1-877-407-4207 for online video conferences anywhere in Ontario.