How Small Details Can be So Important in Real Estate Deals
It’s a lesson that one Toronto buyer recently learned a very hard way. When you’re involved in a real estate transaction, especially one that becomes tricky at some point along the way, it never hurts to double check, and then triple check. And then check again. Because when you don’t, it could end up costing you a lot of money.
It started in June 2011, when Brenda Thomas purchased a home from Sonia Carreno and Simon Jennings. The price was $1,510,000 and Thomas was required to put down a $100,000 deposit on the home when her offer was accepted. The closing was set for early July.
Shortly thereafter however, Thomas soon found out that the City hadn’t approved a permit for construction that had been done on the home four years before. Her lawyer sent a letter to the seller’s lawyer saying that the buyer wasn’t going to close the deal until approval from the City had gone through.
On the day the deal was supposed to close, Roman Zarowsky, the lawyer for the seller, sent a fax to the lawyer for the buyer, Maureen Galea. That fax was sent at 11:51 am, and it stated that they were still trying to get a permit for the work.
Meanwhile, Zarowsky phoned Stewart Title Guaranty Company, and asked it they would provide title insurance that would in essence, make the absence of the permit irrelevant. The title company was prepared to do so.
Shortly after, at 1:18 pm the buyer had come to the conclusion that the deal was not going to close, and she was cancelling the entire deal.
At 3:55 however, Zarowsky faxed another letter to Galea, saying that title insurance had been provided, and that the sellers were prepared to go ahead with the deal. Galea unfortunately, didn’t see that fax but sent yet another of her own at 4:01 pm, reiterating the fact that the buyer was no longer interested in the deal. She only realized later that the fax saying title insurance had been okayed, had not been seen initially.
The deal didn’t go through, and Thomas wanted her $100,000 deposit back. When the sellers refused to give it back, the case went to court – and the sellers won. The judge stated that the buyer’s lawyer was responsible for taking faxes from the machine; as well as the fact that there’s a clause in Ontario real estate contracts that states that if a buyer’s lawyer finds a problem that can be corrected by title insurance, they are required to still accept the deal.
Galea says that the case is going to appeal court, although there’s no word yet on when that will be, or what will happen. It’s definitely a lesson learned though, to always check, check, check.