Mutual Release of a purchase deal in ontario

where is your realtor?

Isn't the whole point of mutual release is to absorb the contract obligations for both parties?
Make sure that you get your lawyer to review the terms.

oasis100 wrote: ↑ where is your realtor?

he gave up on me. he is mad because I want to cancel the deal.

RaC1550 wrote: ↑ Isn't the whole point of mutual release is to absorb the contract obligations for both parties?
Make sure that you get your lawyer to review the terms.

that's what i thought but the sellers are threatening to pursue further legal action if the property is sold for less after we sign the mutual release and i am not sure if this is just them being obnoxious or if they can actually do that.

Depends on what is written in the release. Have your lawyer review it.

Leema44 wrote: ↑ Hello All,

I have a quick question. if you buy a house in Ontario with a firm offer and then decide to back out and the seller agrees to sign a mutual release given that you pay them a certain amount of money from the deposit. can they sue you later on after signing the mutual release if they sell the house for less?

If you fail to close, then yes, you can be sued for more even if you willingly forfeit your deposit.
Fact is, the seller will get your deposit regardless of whether you give it up willingly.

If you agree to nullify the sales contract before closing, that’s a different story.

Leema44 wrote: ↑ that's what i thought but the sellers are threatening to pursue further legal action if the property is sold for less after we sign the mutual release and i am not sure if this is just them being obnoxious or if they can actually do that.

You need to talk to a lawyer to get advice on your actual situation. Your other risk (not covered by the mutual release) is any commissions to your agent.

C

Leema44 wrote: ↑ Hello All,

I have a quick question. if you buy a house in Ontario with a firm offer and then decide to back out and the seller agrees to sign a mutual release given that you pay them a certain amount of money from the deposit. can they sue you later on after signing the mutual release if they sell the house for less?

thank you

where in Ontario? what was your reason to back out after going firm?

What's the reasoning behind backing out? Agent bailed? That's not nice.

In GTA. Reason is I got fired due to covid situation.

Reason is I got fired due to covid situation

Do I still need to pay my agent. I told him to get a mutual release signed and he didn't mention anything about getting paid. Doesn't him signing the release mean that he won't ask for any payment later on?

Damn, that sucks man. I hope everything works out for you. Your agent's a douchebag.

Leema44 wrote: ↑ Reason is I got fired due to covid situation

I am sorry to hear about that. The agent bailing out is unprofessional because this situation is not your own fault.

Thinking about from the seller's perspective, if the value of property has gone up (it probably has if it's a non-condo unit), and they would be able to keep part of the deposit, they would most likely agree to a mutual release because they can probably make more money by selling at a higher price + keep some of the deposit.

A risker strategy you can consider is simply to not close. This is a bit risky, but not overly so, because the value of property has gone up, and the seller will most likely sell the property at a higher value (for their own sake), and they would not be able to get your deposit if they manage to sell the property for a higher amount. So, you should be able to get your deposit back once the new deal is closed.

Obviously, I would consider risks of each approach. If you want to go with the safe route, offer only a small amount (say 5-10% of the deposit) for mutual release, because the seller will already have incentive to do the release to get a higher selling price.

Actually I only signed the offer a week ago so prices haven't changed much. But the seller's lawyer is saying that due to covid restrictions now they won't be able to get the same price for it and they are going crazy on me threatening a lawsuit and asking for 90% of the deposit amount. So that's why I wanna know whether they will still be able to sue me if i pay them what they are asking for and i get a mutual release.

Leema44 wrote: ↑ Actually I only signed the offer a week ago so prices haven't changed much. But the seller's lawyer is saying that due to covid restrictions now they won't be able to get the same price for it and they are going crazy on me threatening a lawsuit and asking for 90% of the deposit amount. So that's why I wanna know whether they will still be able to sue me if i pay them what they are asking for and i get a mutual release.

If you get a mutual release, they won't be able to sue you (check terms of the release document with your lawyer to make sure).

What they are utilizing is likely just a scare/negotiation tactic. Explain to them (nicely but firmly) that you do not have any means to close and that you just lost your job because of covid. Convey strength that you won't be bullied and that going after you won't really do them any good because you don't have the money to pay them anyway (because you lost your job).

Remember, the seller doesn't really want to spend all that time going to the court too. It's a very scary thing for them as well because they will have to spend a lot of money on lawyers that may not pay off if you don't have the money. Don't offer 90% of the deposit, that seems too much in this particular situation. Offer 20%, and say otherwise you won't close (be willing to follow through).

And is there anything i would need to pay the agents after signing the mutual release? Or that release includes everyone?

Leema44 wrote: ↑ And is there anything i would need to pay the agents after signing the mutual release? Or that release includes everyone?

If the agent is just ghosting you, then there isn't much you can do. Chances he won't be bothered to go after you because of the amount of work that will be involved.

Make sure that you document all your communication with the agent that shows you are trying to resolve the situation in a reasonable way, and the agent is being unprofessional by ignoring you. This will become a good defense in case the agent chooses to go after you later.

oasis100 wrote: ↑ where in Ontario? what was your reason to back out after going firm?

That's irrelevant.