[Alberta] purchased Foreclosure property got damaged by hail

Pick up the phone and call your real estate lawyer

You signed on this WITHOUT KNOWING THE ANSWER TO THIS?

CHRIST

YYCREALTOR2021 wrote: ↑
I know we have signed purchase contract with crossed out warranties and everything, because it's foreclosure, but still wondering if seller bank is responsible for fixing this?

I'm just trying to figure out how this works, what if the house burned down while it's already firm and possession is a week away?

Did your realtor not explain the as is where is clause and the obligations of sellers to you? Oh wait now..

Let's try to think this through as somewhat of a real estate class exercise.

If the property was struck by lightning and levelled, would you still have to proceed?

If the basement on a pre-closing inspection showed there's 6 feet of water in the basement, would you still have to proceed?

Does the clause say, 'as is, where is" or does it say, 'as is where is, whenever it is"?

See where I'm going with this yet?

If your offer included the building you contracted for it in the condition it was in "as is" at the time your offer was accepted for whatever condition it was in at the time "where is" at the time your offer was accepted barring normal wear and tear to the date of closing.

@licenced
This isn't necessarily the case. There are court cases about unforseen events that occur between the date of the agreement and the date of closing. It would likely depend on the language in the agreement - what was crossed out and what wasn't et c. And whatever case law Alberta developed.

Was anyone supposed to keep the property insured and if so did, did they?

OP should definitely speak to their lawyer.

Volond wrote: ↑ @licenced
This isn't necessarily the case. There are court cases about unforseen events that occur between the date of the agreement and the date of closing. It would likely depend on the language in the agreement - what was crossed out and what wasn't et c. And whatever case law Alberta developed.

Was anyone supposed to keep the property insured and if so did, did they?

OP should definitely speak to their lawyer.

Except it is definitely the case.


The buyer contracted to buy real proeprty at a particular point in time, if that property is destroyed in whole or in part, the property is no longer what the buyer bargained for and cannot be forced to purchase unless there is some rather strange clause they agreeed to that said they have it accept it the way it is on the day of closing.No person in their right mind would agree to that and no court would cause a buyer to pony up for a property that is not what they bargained for.

A person with no interest in the property cannot insure the property in their own name.

The foreclosing company has stepped into the shoes of the seller and by law must adhere to the same laws that govern every seller. which is that the seller is responsible for the property up to the time of transfer of title. It is their property and whether or not they purchase insurance or self -insure the property cannot be turned over as something other than what they agreed to convey

But yes indeed, the op should be speaking with their lawyer.

Some incredible confidence there! I am assuming you are "licensed" in Alberta? To practice law?

What is the point of clause 14 of the standard Ontario APS if it is that simple? Not that OREA forms don't have pointless clauses.

A 2-minute CanlIi search suggests that this is not as straightforward as you are making it out to be. For example this case discusses the importance of the clauses in the agreement quoting a Supreme Court case on this issue:

https://www.canlii.org/en/bc/bcsc/doc/2 ... c1464.html

This is not an Alberta case nor is it the leading case - just the first hit on Canlii that talks about this type of situation. A lawyer practicing in this area can advise further.

This may or may not be settled law in Alberta. I don't know for sure and it doesn't sound like you do either.

Volond wrote: ↑ Some incredible confidence there! I am assuming you are "licensed" in Alberta? To practice law?

I am not licenced to practice law but I damn well understand real property law to the extent that I am supposed to know it when assisting clients in the purchase and sale of real estate.

What is the point of clause 14 of the standard Ontario APS if it is that simple? Not that OREA forms don't have pointless clauses.

It's a very straighforward clause proving my very point. It means that the seller holds the obligation to maintian the property for the buyer in the condition in which the buyer purchased it. It further stipulates that if there are any insurance policies on the property and there is any substantial damrage to the property the seller is not first in line for the proceeds of the property, the buyer is and the buyer may choose to accept the insurance proceeds and the damaged property or the buyer may terminate the agreement. BUYER"s CHOICE!

That very clause confirms exactly what I have said and this is Canada, the common law will be applied throughout the nation.

There is also nothing in that clause either forcing a seller to purchase insurance or the buyer to accept the damaged property.

The clause for those who don't know it

A 2-minute CanlIi search suggests that this is not as straightforward as you are making it out to be. For example this case discusses the importance of the clauses in the agreement quoting a Supreme Court case on this issue:

https://www.canlii.org/en/bc/bcsc/doc/2 ... c1464.html..

As with that clause you also seem to be confused by this case. The salient excerpts, none of which support your position and all of which supports mine, the buyer cannot be forced to accept a property that is not what they bargained for, hence the talk about adjustments and insurance proceeds, Zhang is seller's lawyer, Choda is buyer's (plaintiff) lawyer.:

The judge

Did the Plaintiffs Breach the Contract?
[104] Applying the legal principles I have discussed to the case before me, I do not consider that the plaintiffs breached the Contract by not being “able” to transfer the mortgage proceeds to the defendants and to complete the sale on the Completion Date. They had secured their mortgage financing before January 4. They had tendered the conveyancing documents on January 5, 2015 after they had learned of the fire. They repeatedly stated that they were willing to proceed with the sale following the receipt of information regarding the defendants’ insurance policy and the fire damage and/or some other accommodation.

[105] As the Court in Hundley confirmed, at para. 77, it was not open to the defendants to call for payment of the balance of the purchase price in circumstances where they were unable to convey what they were required to under the Contract.

[106] Furthermore, I do not consider that it is open to the defendants to argue that the plaintiffs were unable to tender the balance of the purchase price when that inability was brought about by the defendants’ breach. This is so in two respects. First, the defendants were unable to deliver what they had contracted to … They were in “essential default”. Second, the defendants failed to provide the information or to discuss reasonable accommodations that would have enabled the plaintiffs to secure alternate financing.

Not one thing in that case supports your position. Even the sellers here understood that they could not deliver the property to the buyer that the buyer bargained for. But that's not even what this case is about which was that the sellers without letting the buyers know of the fire and giving them a choice of remedy chose instead to call the agreement at an end. It just happens to touch on this very aspect of that very premise of the contract - delivering what was bargained for.

@licenced
Sigh...

I will repeat my point for the third time: whether or not you are correct depends on the contract they signed and on Alberta jurisprudence. And no, Ontario property law is not necessarily applied throughout Canada. Property law is a provincial matter and may differ province to province. Provincial courts may develop differing jurisprudence as well. You don't know Alberta law and you haven't seen the contract so you have only a very general idea of what you are talking about. You could very well be wrong and it would be unwise for OP to rely on your advice.

The existence of clause 14 proves my point, not yours. This clause gives the buyer the protection that you claim the buyer already has by default.

What would happen if a seller crossed out clause 14? Would that seller still be liable? If yes, why bother including this clause? If not, you are clearly wrong and this isn't the common law, but simply what the parties agree to in Ontario by default.

Clause 14 is likely what makes your position correct in Ontario. Do you know if that clause was present in the agreement signed by the OP? If yes, do you know whether it was crossed out?

The case I quoted keeps talking about the contract/agreement. This discussion is even present in the excerpts you quoted. You have to understand the court's reasons not just the outcome. The reasons keep coming back to the agreement between the parties. That's my point: the contract matters. You haven't seen the contract. You don't know the applicable law with any degree of confidence. Where do you get this incredible arrogance then?

Anyway, we agree OP should speak to their lawyer. I won't engage further. The OP should get proper legal advice and so should everyone else who finds themselves in a similar situation. Based on what you have written here, you would be wise to tell your clients to do the same whenever they encounter any legal issue as well. I suspect you already do that anyway as is your ethical duty.

Best of luck to you and OP.

Sigh all you want Voland, I'm even more frustrated because this is basic common sense.
Canada is a federation governed by English Common Law in all provinces except Quebec and Canadian Federal law guides all the provincial laws. This is not a republic where one province can veer from contract law especially with real property - the root of all title belongs to the crown and the crown is who owns and had prescribed for every province everywhere the conveyance of land, in land registry.

It is simply inspid to know as we do that if a buyer on closing finds a fixture that was included in the Offer has been removed or not working that the buyer can successfully sue the seller but for some reason you see foreclosure and suddenly tremble that somehow they have far fewer obligations as a seller than a person such that they can agree to sell a property with a building but if some act of god or anything damages that building, the seller gets to say, too bad so sad. What if it was utterly destroyed? It's ridiculous!

The case you quoted was indeed about the contract - otherwise there would be no case! The court's reason is specific to what I said, I quoted it, it is clear and unambiguous, I cannot think for you but the judge's words cannot be interpreted in any way other than what he said - the seller could not deliver the property as they agreed to in the offer - period!

The buyer was not obligated to close, And that is the crux of the question by the OP - I'll spell it out differently.

The property they purchased has a building on it. That building along with all fixtures not specifically stated as not included is part and parcel of that property - a truss is a fixture, a roof is a fixture, as is a tree or plant all because it is affixed to the property. That building in turn is affixed to the land and therefore by virtue of the Land Registry Act and underlying provincial act concerning the conveyancing of real property is part and parcel of that property that is on land titles. It is one.

OP said the property was damaged from hail, it didn't take any thought whatsoever to recognize that the building was agreed to be conveyed with the land - as one.

OP said nothing about the offer being for the land only and not the building.

It cannot be interpreted any other way that the seller then agreed to a price for the property based on the condition of the property at the time the offer was made and agreed to - that is precisely what, as is, where is means - at the time of the agreement. It does not say, as is, where is only on the date of this agreement.

And finally, the major component to every contract in this country is that a contract can only be ratified based on what it says or was understood to say by both parties and not on what it does not say or does not imply. So If it doesn't say the buyer is obligated to pay the purchase price and close as per outlined in the offer even if the property is damaged, altered, destroyed, swallowed by a sinkhole, destroyed by aliens, fall into Lake Minnewnaka - no judge in his country is going to make the buyer pay for something they did not bargain for and obviously op did not enter into such an agreement.

PS, the buyer by default has ro be given the proeprty as agreed to. Again I showed you the judge's comment.

Your interpretation of clause 14 is incorrect. It is there to specifically state that in the event of insurance the buyer has the right to accept the proceeds plus the damaged property or not at all. If it's not there the seller has to deliver the property as bargained for.


It's as clear as day!

ps. do you have a comprehension problem? I gave no advice to the OP except to speak with a lawyer. I interpreted for them the basic common law.

Volond wrote: ↑ The existence of clause 14 proves my point, not yours. This clause gives the buyer the protection that you claim the buyer already has by default.

What would happen if a seller crossed out clause 14? Would that seller still be liable? If yes, why bother including this clause? If not, you are clearly wrong and this isn't the common law, but simply what the parties agree to in Ontario by default.

Clause 14 is likely what makes your position correct in Ontario. Do you know if that clause was present in the agreement signed by the OP? If yes, do you know whether it was crossed out?

Who woulda thunk?