Homes and Condo Mississauga

Make an offer, but beware — in an uncertain market, property law can hurt you

"When the residential real estate market is on the rise, most people – perhaps with the exception of the first time buyers – will be happy homeowners and investors," Justice Mark Edwards wrote in a case earlier this year.

"When the market turns and falls," the Supreme Court of Ontario sued, "it's not for the faint of heart.

  A judgment by the Supreme Court of Ontario this year prompted buyers of real estate persuading their finances to overload in the wake of a failed deal.
A judgment by the Ontario Supreme Court urged real estate buyers to overload their finances in the wake of a failed deal. ( Dreamstime )

"The facts in the case of Gamoff v. Hu show tragically how a family, presumably desperate for their dream home, became embroiled in a bidding war and their ability to finance the purchase became too great. prize of that dream house, "added the judge in his decision.

At the beginning of last year, Douglas and Sheila Gamoff owned a property at Wilmac Ct., in Whitchurch-Stouffville.

They listed their property for $ 2 million. with local brokerage: within five days there were 18 screenings and three offers.

Yixing Hu and David Lea filed an offer for $ 2,050.00, but were told it was too low.

Although not Wanted to take part in a bidding war, they eventually signed a $ 2,250,000 offer, which was accepted.

They paid their first $ 30,000 deposit on offer, but failed to make the second $ 90,000 down payment. days later to pay.

On that day Hu and Lea told the sellers that they did not have the necessary financing to close the transaction, each side hired a real estate attorney.

Shortly thereafter, the liberal pro vincial government to impose a 15 percent non-resident speculation tax. As a result of the tax, the real estate market in the Greater Golden Horseshoe area was cooled considerably.

The Gamoffs has again offered the property for $ 2,250,000. There were no offers between May 1 and May 17, so the price of the offer fell to $ 1,998,000. By July 26, there were still no offers and the price was further reduced to $ 1,798,000.

At the end of July, the sellers finally accepted an offer to sell at $ 1,780,000. The transaction was closed on 3 October 2017.

The Gamoffs persecuted Hu and Lea for their loss. Last March, the parties were in court where the Gamoffs asked the judge for what is known as a summary judgment: a court ruling on undisputed facts without a full court case.

The Gamoffs argued that their losses were $ 470,000 – the difference between the $ 2,250,000 price in the first offer and the final selling price of $ 1,780,000.

The issue for Justice Edwards was whether the sellers did everything possible to minimize the damage suffered.

In the end, the judge found the plaintiffs favorable and awarded them $ 470,000 plus the cash expenses they made.

The final words of the judge are a lesson for all home buyers in an uncertain market.

"I have all sympathy for the suspects," he wrote.

"With the changes on the real estate market in Greater Toronto Area, I have every expectation that there may be more cases where buyers feel that they have overloaded themselves in a shrinking market.

" Buyers would do well to Consider buying their offers depending on financing and selling their existing home if they have one, "Justice Edwards adds.

Bob Aaron is a real estate lawyer in Toronto, who can be reached at . ] or on Twitter: @ bobaaron2

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