Real Estate

Getting out of purchase

  • Last Updated:
  • Aug 25th, 2017 1:27 pm
Tags:
[OP]
Newbie
Aug 6, 2017
3 posts
4 upvotes

Getting out of purchase

Help! We need some advice. After a home inspection we learned the common tunnel that allows access to the garages of the townhomes may have some structural issues, to the tune of $50k - 100k shared by about 10 homes. But the problem is that the inspector couldn't say for sure if it's a problem, and we need to get a structural engineer to verify. And that's going to cost us $2000 to find out! And we learned that the "rules" for repair are based on the majority of homeowners agreeing, and there's no coop or reserve fund. So we want out. But our realtor says it's not a strong enough reason since it's not confirmed that there is a problem and we're legally obligated to complete the sale. What can we do?
24 replies
Deal Fanatic
User avatar
Sep 8, 2007
9461 posts
11235 upvotes
Way Out of GTA
Usually home inspection clauses have wording strong enough in favour of you, the buyer, that you can walk if something like this occurs. In fact they are usually called 'cold feet' clauses since they basically allow to walk for anything. What wording does your clause have?

Instead of speaking to the realtor on the deal, speak to your lawyer on the deal.
Deal Addict
Jul 3, 2007
4089 posts
4566 upvotes
Toronto
cartfan123 wrote: Usually home inspection clauses have wording strong enough in favour of you, the buyer, that you can walk if something like this occurs. In fact they are usually called 'cold feet' clauses since they basically allow to walk for anything. What wording does your clause have?

Instead of speaking to the realtor on the deal, speak to your lawyer on the deal.
yes get a good lawyer with experience on this issue , dont even bother trying to tackle this yourself or with the agent....

this happens all the time.... my friend just had $5000 in condo plumbing repairs because half the units had illegal plumbing
Deal Fanatic
Jul 4, 2004
7135 posts
4042 upvotes
Ottawa
It depends a lot on the wording on the conditions on the offer. As cartfan123 said, they are often very generic which allows the prospective buyer a lot of leniency to back out.

Having said that, I would certainly talk to your agent and your lawyer to make sure you are not held liable.
Deal Guru
Dec 11, 2008
11336 posts
2304 upvotes
Do you have a clause/condition of home inspection when you purchased?

If you are in Ontario, and you have that condition, you can technically just use that condition and not follow through with the purchase.

Otherwise, speak to your real estate lawyer.
Jr. Member
User avatar
Oct 21, 2016
117 posts
71 upvotes
Toronto, On.
As a Realtor, I have to ask: why would you complete a home inspection AFTER your deal has become firm? That's VERY backwards around here.

If you're in Ontario, In terms of clauses on your agreement, two conditions come to mind (one of which shoots you in the foot).

13. INSPECTION: Buyer acknowledges having had the opportunity to inspect the property and understands that upon acceptance of this Offer there shall be a binding agreement of purchase and sale between Buyer and Seller. The Buyer acknowledges having the opportunity to include a requirement for the property inspection report in this Agreement and agrees that except as may be specifically provided for in this Agreement, the Buyer will not be obtaining a property inspection or property inspection report regarding the property.

14. INSURANCE: All buildings on the property and all other things being purchased shall be and remain until completion at the risk of Seller. Pending completion, Seller shall hold all insurance policies, if any, and the proceeds thereof in trust for the parties as their interests may appear and in the event of substantial damage, Buyer may either terminate this Agreement and have all monies paid returned without interest or deduction or else take the proceeds of any insurance and complete the purchase. No insurance shall be transferred on completion. If Seller is taking back a Charge/Mortgage, or Buyer is assuming a Charge/Mortgage, Buyer shall supply Seller with reasonable evidence of adequate insurance to protect Seller’s or other mortgagee’s interest on completion.

The last one is usually reserved for things like fires or floods where the vendor (seller) receives monies from insurance - not sure if this would apply. That said, please consult your Lawyer. Your Realtor is out of their realm here.
Sales Representative, Right at Home Realty, Toronto.
Deal Addict
User avatar
Feb 10, 2007
2739 posts
318 upvotes
Marsh6 wrote: Help! We need some advice. After a home inspection we learned the common tunnel that allows access to the garages of the townhomes may have some structural issues, to the tune of $50k - 100k shared by about 10 homes. But the problem is that the inspector couldn't say for sure if it's a problem, and we need to get a structural engineer to verify. And that's going to cost us $2000 to find out! And we learned that the "rules" for repair are based on the majority of homeowners agreeing, and there's no coop or reserve fund. So we want out. But our realtor says it's not a strong enough reason since it's not confirmed that there is a problem and we're legally obligated to complete the sale. What can we do?
Most realtors are there to take your commission. Ask someone else.
Did you put a home inspection clause in your contract?
BlackJays wrote: shame has been acheived
Deal Fanatic
Jan 15, 2004
7324 posts
1865 upvotes
+1, don't trust the agent as the agent has financial interest in closing the deal (so most likely the agent is biased). Go see a lawyer.
Member
Dec 29, 2007
442 posts
244 upvotes
Did any of the neighbours know about this issue? Did the Seller know about this issue and not disclose to you?
Next steps are to contact a lawyer to review your Agreement of Purchase and Sale. They'll advise appropriately.
Sr. Member
Aug 15, 2013
848 posts
415 upvotes
Guelph
Why would the OP need a lawyer right away? Or consult the realtor for that matter. The issue is whether there is an inspection condition in the offer and if yes, the wording of the inspection condition.

All the offers i have put, the offer said something like.. offer is conditional on inspection, satisfactory to buyer's sole and absolute discretion. If you have something similar, you don't need to consult anyone, just ask for a mutual release.

Now if you don't have an inspection condition or the wording does not say buyer's discretion or you have waived the inspection condition already, you are pretty much SOL and am not sure how a lawyer can get you out, free.
Deal Addict
Feb 5, 2009
2808 posts
939 upvotes
Newmarket
Realtor1981 wrote: As a Realtor, I have to ask: why would you complete a home inspection AFTER your deal has become firm? That's VERY backwards around here.

.
Unless I missed something I do not think OP said the inspection was done after the deal was firm.
OP, sounds like your agent may be working for the best interest of himself not yours.
I would think that if you had inspection clause in your contract, and the inspection discovered potential serious issues you have few options:
-close the deal
-walk away
-demand the seller to cover the cost of engineer and to cover the cost of potential repairs, and walk away if the demand is not met
-negotiate the price reduction due to potential undisclosed issues
Jr. Member
User avatar
Oct 21, 2016
117 posts
71 upvotes
Toronto, On.
Homerhomer wrote: Unless I missed something I do not think OP said the inspection was done after the deal was firm.
OP, sounds like your agent may be working for the best interest of himself not yours.
I would think that if you had inspection clause in your contract, and the inspection discovered potential serious issues you have few options:
-close the deal
-walk away
-demand the seller to cover the cost of engineer and to cover the cost of potential repairs, and walk away if the demand is not met
-negotiate the price reduction due to potential undisclosed issues
You're right. I read that fast.

OP, if that's the case (inspection prior to going firm) then the only way you can leave the deal is if your agent drafted something called a 'condition precedent' which essentially means X must happen prior to X occurring.

There are many ways to author this condition, however, there should be a line that reads "...home inspection by a qualified inspector at the buyers sole and absolute discretion..."

Edit: and at your expense for obvious liability reasons.
Sales Representative, Right at Home Realty, Toronto.
Deal Addict
Jul 11, 2010
1282 posts
320 upvotes
Toronto
You need to get your realtor to find out if the seller was aware of this and did not disclose this. Get yourself a good lawyer that specializes in condos to advise what your options are.
Deal Addict
Jun 2, 2012
1595 posts
942 upvotes
GTA
This wouldn't be related to a home inspection...
It would be the status certificate, that would point this out.... minutes etc...
Deal Fanatic
Dec 5, 2009
5755 posts
3589 upvotes
All these answers and the OP left out the most important detail to his situation. .....

Was the sale agreement conditional on inspection? If so, you can back out for any reason, no problem.

Or was the sale already firm. And the inspection done later. In which case you cannot easily back out of the deal and need a lawyer, etc.
Deal Addict
User avatar
Mar 3, 2011
4527 posts
26999 upvotes
There is too much speculation going on here and not enough detail provided.

As GSpeed mentioned, this is part of the townhouse complex which is a condo corporation and needs to be disclosed in the status certificate, was one asked for or provided when you were interested in the property?
__
Want to know the latest Costco Clearance items and prices in Ontario.. check out my thread here.
[OP]
Newbie
Aug 6, 2017
3 posts
4 upvotes
Thanks all for your replies. The sale was conditional upon home inspection, so we were shocked when our realtor told us that the problem found wasn't "enough". She then finally relented and spoke to the other agent to cancel the deal. Unfortunately we haven't received a reply signature from the sellers. The notice we signed says the offer becomes null and void upon receipt.

We signed and gave notice as of 3 days ago, but what happens if they don't sign???

Here's the clause:
"The buyer has had the immovable inspected by a building inspector, he has read the inspection report, copy of which is attached to this notice. Consequently he is making the offer to purchase null and void."
Deal Fanatic
Jul 3, 2011
6517 posts
3788 upvotes
Thornhill
Is this in Quebec?
Marsh6 wrote: Thanks all for your replies. The sale was conditional upon home inspection, so we were shocked when our realtor told us that the problem found wasn't "enough". She then finally relented and spoke to the other agent to cancel the deal. Unfortunately we haven't received a reply signature from the sellers. The notice we signed says the offer becomes null and void upon receipt.

We signed and gave notice as of 3 days ago, but what happens if they don't sign???

Here's the clause:
"The buyer has had the immovable inspected by a building inspector, he has read the inspection report, copy of which is attached to this notice. Consequently he is making the offer to purchase null and void."

Top