Buying a House
All of us have either bought a house or hope to do so in the very near
future. In practically every case the offer will be made on the standard form of contract
of purchase and sale available at most stationary stores. Few people have reason to read
the standard form of contract, especially some of the fine print. When you are making or
accepting an offer to purchase a house, there usually is not opportunity to read the
document. What are some of the questions that arise? How does a lawyer help?
First, a contract for the sale of land must be in writing and signed
with only a few exceptions to this rule. The contract can be found in telexes or letters
exchanged by the buyer and seller. The minimum that must be contained in writing is the
names of parties, a description of the property, and the purchase price. If these
essentials are contained in a document, and signed by the parties, then there is a valid
Any subject clauses in the contract should be clearly and precisely
stated with a date for removal of the clauses. Some court cases have held that a clause
such as "purchaser obtaining suitable financing" is too vague to be
unenforceable. A contract with a subject clause such as this will not be enforceable.
Entirely subjective clauses such as "subject to the President's approval" can
reduce the contract to nothing more than an offer. This may require nothing more of the
individual relying upon such a clause than to act honestly and allow that individual to
walk away from the contract. As a general rule, a bystander reading the clause should be
able to determine what has to be done, by whom, and by what date in order to satisfy the
The removal of subject clauses should be in writing, signed by the
person removing the clause and preferably by the other side also. The clause must be
removed by the date and time stated in the clause. If this is not done, then the contract
The completion date is the date by which the vendor must deliver title
and the purchaser must pay the purchase price. If the purchaser is in breach, the vendor
has an election to make. The vendor could elect to keep the deposit paid under the
contract as damages. The vendor could elect not to accept the breach and instead sue the
purchaser to complete the purchase of the property. On the other hand, the vendor might
sue the purchaser for actual damages resulting from the purchaser's breach. If the vendor
is in breach, then the purchaser can sue for specific performance or accept the breach by
the vendor and seek a refund of the deposit. Specific performance requires the party in
breach to live up to the contract. If for some reason the property can not be transferred,
then damages will be awarded.
The contract requires the vendor to deliver clear title. This generally
means that when the title is registered in the name of the purchaser, it will be clear of
all mortgages, judgments, and liens that might be registered against the title of the
vendor. The Land Title Act provides that all titles are subject to subsisting
conditions, provisos, reservations and exceptions in the original or other grant from the
Crown. Usually this involves only mineral rights. The standard form of contract expands
the exceptions to include restrictive covenants and rights-of-way for public utilities.
This could include covenants for municipal water and sewer lines, telephone cable and
hydro lines and poles, and other rights-of-way for utilities or public services. These
covenants and rights-of-way will remain registered against the title.
The contract contains a phrase which says "Time is of the
essence". This means that everything required to be done under the contract must be
done in strict accordance with the deadlines stated in the contract. For example, if there
is a date specified to remove a subject clause for obtaining a new mortgage, then you must
remove the clause by the date stated in the contract. If this is not done, then the
contract lapses. Unless something is done to waive this requirement, there must be strict
compliance with all deadlines in the contract.
How Does a Lawyer Help?
Buying or selling a house can be a complicated and daunting event. It
involves a major financial commitment. There are many complex questions that must be dealt
with. A real estate lawyer can play a valuable role at two different stages: while the
contract is being negotiated and in transferring title to the property.
During the negotiation stage, the lawyer can search the title to the
house and provide a preliminary opinion on what charges are registered against the house.
There may be a statutory building scheme that governs what you can or can not do on the
property, or controls the parking of vehicles. There might be a driveway easement or an
encroachment easement that forms part of the title. The property could be subject to liens
or judgments. A lawyer can investigate these matters and provide proper legal advise on
how these items might affect you so that you can make an informed decision about the
The purchase and sale could be contingent on certain events or
conditions. For example, you might only be prepared to purchase the house if your present
house is sold first. Or it might be a condition of the purchase that the house is properly
inspected and no defects are found. A real estate lawyer has the experience and training
to draft a contract that will protect you in such cases.
Depending on where the property is located, it might be necessary to
investigate the zoning for the property and the uses permitted under any zoning by-laws,
or requirements of the health department. In the event you plan to carry on a home based
business, the zoning by-laws must be reviewed to ensure this is allowed. If the property
is within the Agricultural Land Reserve, or located in the proximity of an airport, then
special regulations that apply to the property could affect your intended use of the
property. Such questions require the assistance of a lawyer familiar with the laws that
Once the contract has been signed, then the lawyer will act on your
behalf to ensure that you receive exactly what you are entitled to under the contract. If
you are the seller, the lawyer will ensure that any charges such as mortgages, judgments
or liens are paid out in the proper amounts and discharges or releases obtained. The
lawyer will also review adjustments to the purchase price for items such as property
taxes, user rates, and the like. If you are the buyer, the lawyer will ensure that the
title is properly registered in your name free of all liens, mortgages or judgments before
the money is released to the vendor. In the event work has recently been done which might
permit a builders lien to be filed against the property, the lawyer will ensure the
provisions of the legislation are followed in order to protect you.
Unfortunately there are times when a contract is not fulfilled for a
number of reasons. In case the other side breaches the contract and fails to carry out the
terms agreed to, you need legal advise on what your rights are under the contract and what
steps you have to take to protect yourself. It may be that you wish to enforce the
contract so that title to the property is transferred. Or you may be better advised to
accept the breach but seek damages suffered by you. You can only make the proper decision
if you are first informed of your rights and the legal process for enforcing your rights.
In such circumstances, having a qualified real estate lawyer advising you can be of a
If you have any questions on the issues discussed above,
or on any legal issues in general, please contact
Sucha S. Ollek at: firstname.lastname@example.org.