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 contract.

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 subject clause.


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 will lapse.

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 property.

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 apply.

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 significant benefit.

If you have any questions on the issues discussed above, or on any legal issues  in general, please contact Sucha S. Ollek at: