Undoing a Mistaken Real Estate Contract

You must have heard your realtor wrong, and now you’re wondering about the legalities of undoing a mistaken real estate contract. You owe it to yourself to fix mistakes you inadvertently make when signing a home buyer contract, and to know what you are agreeing to.

Before non est factum (not by my doing) becomes the undoing of your real estate contract, here’s what you need to know. You can remedy a bad outcome from a mistaken real estate contract using a non est factum defence if:

  • you were mistaken about the nature of your real estate contract
  • that mistake resulted from another party’s misrepresentation
  • and not simply because you signed a real estate contract without reading it.

Ontario real estate law questions you ask us. 

Did GTA Buyer Owe Double Commission?

A GTA resident whose families’ Mississauga offer to purchase was rejected discovered that when she was asked to pay a commission by a realtor she was no longer using (Sutton Group-Admiral Realty Inc. v Taborovska, 2021 ONSC 2837). 

Ganna’s parents, who lived overseas, signed a buyer representation agreement (BRA) in November 2018, committing their daughter to using the realtor until the real estate contract expired. 

Your realtor’s duty to you

Ganna wasn’t familiar with how a real estate contract works. When the Mississauga deal fell through, she used a new realtor to make a successful offer on a Toronto home 10 days later. The deal should have been a source of joy. But Ganna’s first realtor demanded a 2.5% commission on the Toronto home.  

Who’s at Fault for Mistaken Home Buyer Contract?

At trial, the Ontario Supreme Court agreed while Ganna had also signed the BRA, the realtor had discussed the contract and property negotiations with her father, not her. The realtor failed to explain to Ganna’s father that the home buyer contract applied to any property the family purchased, not just the Mississauga home.

Ganna’s understanding of the BRA came from her father’s explanation, which was wrong. But was Ganna careless in signing the real estate contract, and was she using that to avoid liability for the commission? The realtor argued she had a legal obligation under Ontario law to read a home buyer contract before consenting to it (Isaacs v Royal Bank of Canada, 2010 ONSC 3527).  

How real estate deposit rules (Ontario 2021) affect you.  

When a Real Estate Contract is Void

Now generally speaking, not reading a document is no defense for being mistaken about its contents. However, the realtor had not explained the real estate contract to Ganna. She instead relied on her father’s understanding of the contract, provided by the realtor, and that was misrepresented. The BRA was unenforceable, the court ruled, and that made the realtor’s commission void.

3 Most Common Mistakes in a Real Estate Contract 

Misrepresentation is only one cause of a mistaken real estate contract. Does your contract contain these common mistakes?

  1. Real estate listing was exaggerated.

Realtors can be inventive in listing a property for sale. Clients have sued when a property failed to deliver on promises a realtor made about its condition, or what’s included, such as a peaceful location a mere block away from a busy roadway.

Why how you word your offer makes a difference. 

  1. Realtor didn’t check local conditions.

A realtor who fails to explain local bylaws or environmental issues that could affect your property can be taken to court. If you buy, then suddenly discover you’re living on a known floodplain or former landfill, it could be time to see a lawyer.

  1. Property had discoverable defects.

A firm offer real estate deal can leave you dangling if a realtor fails to arrange for a SPIS (seller property information sheet), or makes light of costly defects. Your purchase is in potential legal jeopardy, and so are you.  

Why making a firm offer for real estate is never a safe bet. 

Why You Need a Real Estate Lawyer (Ontario)

Axess Law takes the guesswork out of finalizing real estate deals. When you need a real estate lawyer (Ontario), we have licensed legal professionals nearby you. We review your agreement of purchase and sale for essential clauses that allow you to withdraw if a home inspection goes poorly, or your mortgage lender’s property appraisal comes up short.

When to include a home inspection clause

Our virtual real estate lawyers liaise with banks, credit unions, or private lenders to process mortgage loans, or discharge existing loans you have on a property you are selling at the same time. We prepare all your legal documents, get you to sign, and give you the keys to your new home.

Change an offer to purchase when financing falls through. 

Your deposit is protected in a trust account until your home inspection, and other conditions in your agreement of purchase and sale, are satisfied. Your Axess Law real estate lawyer (Toronto, Greater Toronto Area or Ottawa) negotiates with the sellers’ lawyer if you need more time to conclude your home purchase. We give you a final accounting of all your legal and property adjustment expenses with your bill.

Low Flat Fees for Ontario Legal Services

You pay less at Axess Law for legal services than at traditional law firms. Our simplified, flat fee legal services start at $999.99 and up plus HST to buy Ontario  property, or $799.99 and up plus HST to sell. Transfer title to property to a family member or spouse for only $649.99 and up plus HST. 

Find an Axess Law real estate lawyer (Toronto). 

Book a Real Estate Lawyer Online

Access law services near you without leaving home. Book remote real estate lawyer appointments online, or visit our open law offices in Greater Toronto Area and Ottawa, to find times that work for your schedule. Too busy to drop by? Dial our 1-647-479-0118 lawyer line (toll free to 1-877-552-9377) to speak with a live operator and arrange convenient appointment times. 

Axess Law has onsite parking, and is easily accessible by public transit.

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