Fix Real Estate Purchases Cancelled By Mistake
Published on 29 August 2022, 07:22:56 AM
Real estate purchases cancelled by mistake may be fixable.
Call a real estate lawyer if you make these common mistakes:
- You missed the deadline for a good faith deposit.
- The irrevocable period to sign the offer to purchase lapsed.
- You left insurance to the last minute, then discovered the property has aluminium wiring.
- You sent a confusing or wrong email that messed up the sale.
How to cancel a house purchase agreement in Ontario.
What Does it Mean When a House is Cancelled?
Your signed witnessed real estate purchase agreement is a legally binding contract. While the seller may agree to cancel by mutual consent, you could lose your deposit, and face other financial penalties.
Even if you have changed your mind, can’t find favourable financing, or the home has glaring defects after you buy it, you may struggle to cancel the agreement of purchase and sale.
What happens to real estate purchases cancelled by mistake may be completely different.
Your real estate lawyer’s role in buying or selling property.
How Courts View Real Estate Purchases Cancelled By Mistake
Your mistaken email may not survive a court challenge.
An Ontario home buyer discovered that when he took a developer to court for a real estate purchase cancelled by mistake (Sadiq v Simcoe Ridge (ARH) Homes Ltd., 2022 ONSC 2630).
The buyer signed real estate purchase agreements for lots in two different subdivisions the same day. Five days later, at 11:55 p.m., he emailed the first subdivision developer, cancelling his purchase before the cooling period ended (July 20, as he stated in his email). The developer cancelled the contract without penalty, and resold the lot July 23.
It would have been game over, had the buyer not asked the court for compensation for a real estate purchase cancelled by mistake. He argued he meant to cancel the other lot, and had inadvertently emailed the wrong developer.
The details in the agreement to purchase told a different story. The cooling period for the cancelled contract was indeed July 20, and the other contract July 28. The court was unconvinced the buyer had made a mistake.
And those other common mistakes:
- The contract is null and void if you miss any deadline. The seller may agree to amend it, but otherwise the contract is breached and the sale cancelled.
- The seller can move on to the next buyer if you fail to sign back a counter-offer before the irrevocable period lapses.
- Lenders require fire insurance for home loans. You can be forced to pay cash, or forfeit your deposit if you are relying on a mortgage to finance your purchase.
Making an amendment to the agreement of purchase and sale.
What Happens If…
You Want to Back Out of a Purchase Agreement
A buyer can back out of a purchase agreement. A carefully drafted agreement of purchase and sale prevents having real estate purchases cancelled by mistake, and protects your buyer’s right to cancel.
You can usually withdraw without consequences if:
- the home inspection is unsatisfactory
- you can’t obtain financing and the offer is a subject to it
- your offer expires before the seller accepts
- the home is destroyed before possession by fire, flood, or a storm.
When is it too late to back out of buying a house in Ontario?
A Seller Wants to Back Out
What to do if the seller backs out of the contract? Real estate purchases cancelled by mistake can have financial consequences, but so can deliberate cancellations.
You may be able to hold the seller to strict performance, which means they have to complete the sale, or compensate you for opportunity loss and expenses cancelling the sale cost you. Otherwise, request your deposit back.
If the agreement of purchase and sale is written in a way that gives the seller the right to withdraw for any reason, see a licensed real estate lawyer for advice.
What to do when a buyer won’t close.
A House Purchase is Cancelled
When you made a firm, unconditional offer, weigh your options before cancelling. The seller can usually keep your deposit, and you may be liable for costs for relisting and holding the home. If the seller settles for a lower price after you walk away, they could sue you for the difference between your offer and the successful bid.
Instead of cancelling, consider:
- getting a private mortgage to buy the home
- renting part for extra income
- using it as an investment property or AirBnB.
How private mortgages work.
Why You Need a Real Estate Lawyer
Axess Law’s virtual real estate lawyers review agreements of purchase and sale for essential clauses that give buyers or sellers the right to cancel.
Your Axess Law lawyer looks for red flags that a contract disadvantages you, or could leave you paying significant penalties if financing arrangements fall through. We answer questions like do you get the deposit back if the house sale falls through, or who is liable if defects are found after a home inspection.
Our professional legal team checks for condo status certificates, and mandatory fire insurance binders to complete your purchase. We amend the agreement if you opt pull out of a new build condo purchase during the 10-day cooling off period.
Do you get the deposit back when buying a house?
Your Axess Law real estate lawyer negotiates troublesome home inspection reports with the seller’s lawyer to see if minor repairs can be made before you take possession. We advise if your contract allows you to cancel based on an unsatisfactory home inspection report.
Title to your property is searched for financial claims and construction liens, then transferred to your name at a local land registry. If you’re financing your home or land purchase through a mortgage, we finalize the legal documents your lender requires and add their name to title.
Documents to take to your real estate lawyer appointment.
Affordable Real Estate Lawyers, Anywhere You Are
Access lawyers for less in Greater Toronto Area, Ottawa, or anywhere in Ontario when you buy, sell, or transfer property. Axess Law’s flat fee real estate lawyers are affordable, and our rates are all inclusive (excluding taxes, disbursements, and third-party charges). Axess Law offers you only the legal services you absolutely need. Your final invoice includes no surprises or hidden charges. Your itemized statement of adjustments is explained when we deliver it, and we answer any questions you have about it.
Make Bookings by Phone or Online
Axess Law’s virtual real estate lawyers are available 7 days a week, anywhere you are in Ontario. E-sign from any home computer, laptop, tablet, or compatible mobile device. Ask about Axess Law’s secure, confidential remote video conferencing services today. Dial our 647-479-0118 lawyer line, or toll free to 1-877-402-4207, for real estate lawyers near you. Book appointments online with our easy web form to choose times convenient for you or, for personal assistance, drop by any Axess Law location.
We have onsite parking, and easy transit access.
