By Martin Loranger (firstname.lastname@example.org)
Many clients have asked me how, if at all, the emergence of the Covid-19 virus in Ontario has impacted Real Estate transactions. The answer to this question depends on the type of real estate transaction contemplated. The goal of the present article is to provide readers with a greater appreciation of the potential challenges involved in closing real estate deals during the present pandemic, and to provide practical information to avoid potential pitfalls.
In the context of all Real Estate transactions, it is crucial to avoid tight deadlines as they may render the timely completion of a given transaction unfeasible. Purchasers should be weary of tight deadlines contained in Agreements of Purchase and Sales (APS), including but not limited to, performing title searches and home inspections, and obtaining financing.
Land Title offices, which are often crucial to performing title searches, are still generally open but have reduced hours, and some have had to close on an ad hoc basis. While Home inspections continue to occur, there is always the possibility that the contracted home inspector develops symptoms, rendering him or her unable to perform the inspection. It is therefore imperative to schedule a home inspection as soon as possible. Further, while financial institutions continue to provide funding for closing, several institutions require that lawyers submit all documentation 72 hours in advance. Such a requirement, combined with a short delay between the date of signing of the APS and the date of closing, can lead to funds being unavailable on closing, consequently leaving purchasers unable to close their transactions and potentially facing unforeseen costs and/or litigation. Sellers that require the funds obtained from the sale of a property to purchase another property must be sensitive to these realities as a delay in the sale of one property can adversely affect the timely closing of a subsequent purchase.
The purchase of a condominium creates an additional challenge, namely obtaining and reviewing the condominium’s status certificate in a timely manner. It is imperative that condominium purchasers ensure that the APS provides ample time for your lawyer to order and review the status certificate. Obtaining the status certificate and obtaining responses to queries related to it can take time. As a reminder, the standard form APS includes a clause that states that time is of the essence.
While this article discussed the necessity of planning adequately to avoid unforeseen delays, it may happen that the luxury of a closing date that is one month after the date of signing the APS is not available. If you find yourself in this situation and if the closing documents need to be witnessed virtually, strongly consider retaining a lawyer located in your City to avoid potential delays related to mailing signed documents required for closing. It is important to retain a lawyer as soon as possible, preferably prior to signing the APS. Lastly – and irrespective of Covid-19 – you should never buy a property and sell a property the same day.
Should you require legal representation in the context of your Real Estate transaction, please contact Lister-Beaupré Lawyers/Avocats and we will be honoured to be of service.
The information contained in this blog is for information purposes only. The comments contained herein do not constitute legal advice and should not be relied upon to replace legal advice.