Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only.   If you need legal advice on your agreement of purchase and sale or on the deposit specifically, you should seek professional assistance (e.g. make a post on Dynamic Lawyers).  We have Toronto, Ottawa, Hamilton, Brampton, Mississauga and other Ontario lawyers registered to review your agreement of purchase and sale or the deposit and advise accordingly.

Generally, the deposit a buyer puts down in respect of an agreement of purchase and sale is only released by the listing brokerage in very limited circumstances, including:

• performance and completion of the Agreement of Purchase and Sale;
• a term or condition concerning the deposit in the Agreement of Purchase and Sale;
• a mutual release signed by all the parties; or
• court action concerning the deposit leading to a judgment.

If the Agreement of Purchase and Sale is silent on specifically what happens to the deposit on termination, courts will generally take the view that, if the buyer defaults, then the deposit is forfeited to the seller. If the seller defaults under the agreement, however, the deposit is returned to the purchaser (unless the agreement says otherwise). Finally, if the agreement is frustrated because of some event or condition that arises beyond the control of the buyer or seller, then the purchaser is entitled to the return of his or her deposit (unless the agreement says otherwise).

Where the purchaser defaults, there is no requirement for the seller to prove damages. This means that, even in the case where the seller resells at a purchase price that is high enough to compensate for any loss from the first sale, the seller may nevertheless retain the deposit.

Whether a Court will return a deposit to a defaulting purchaser depends on a three-part test – all of which must be satisfied in favour of the purchaser for the deposit to be returned:

• Was the conduct of the purchaser reasonable in the circumstances?
• Was the purpose of the deposit to secure the payment of the purchase price?
• Was there a substantial disparity between the value of the property forfeited and the damage caused to the seller by the breach?

In Gajasinghe v. Dewar, 2007 CarswellOnt 5738, the Ontario Superior Court of Justice applied this three part test and refused to return a $20,000 deposit to the defaulting purchaser. Although the Court found that the purpose of that deposit was to secure the purchase price and that there was a substantial disparity between the amount of the deposit and the amount of damages suffered by the seller, the purchaser’s conduct was not reasonable.  Specifically, the Court found that the purchaser’s actions were “indicative not of a purchaser who was ready and willing to close but rather of one who was searching for an excuse not to close”.

Generally, the deposit is only released by the listing brokerage in very limited circumstances, including:

• performance and completion of the Agreement of Purchase and Sale;
• a term or condition concerning the deposit in the Agreement of Purchase and Sale;
• a mutual release signed by all the parties; or
• court action concerning the deposit leading to a judgment.

If the Agreement of Purchase and Sale is silent on specifically what happens to the deposit on termination, courts will generally take the view that, if the buyer defaults, then the deposit is forfeited to the seller. If the seller defaults under the agreement, however, the deposit is returned to the purchaser (unless the agreement says otherwise). Finally, if the agreement is frustrated because of some event or condition that arises beyond the control of the buyer or seller, then the purchaser is entitled to the return of his or her deposit (unless the agreement says otherwise).

Where the purchaser defaults, there is no requirement for the seller to prove damages. This means that, even in the case where the seller resells at a purchase price that is high enough to compensate for any loss from the first sale, the seller may nevertheless retain the deposit.

Whether a Court will return a deposit to a defaulting purchaser depends on a three-part test – all of which must be satisfied in favour of the purchaser for the deposit to be returned:

• Was the conduct of the purchaser reasonable in the circumstances?
• Was the purpose of the deposit to secure the payment of the purchase price?
• Was there a substantial disparity between the value of the property forfeited and the damage caused to the seller by the breach?

In Gajasinghe v. Dewar, 2007 CarswellOnt 5738, the Ontario Superior Court of Justice applied this three part test and refused to return a $20,000 deposit to the defaulting purchaser. Although the Court found that the purpose of that deposit was to secure the purchase price and that there was a substantial disparity between the amount of the deposit and the amount of damages suffered by the seller, the purchaser’s conduct was not reasonable.  Specifically, the Court found that the purchaser’s actions were “indicative not of a purchaser who was ready and willing to close but rather of one who was searching for an excuse not to close”.

written by admin \\ tags: agreement of purchase, breach, brokerage, circumstances, court of justice, damages, disparity, favour, judgment, ontario superior court, ontario superior court of justice, purchaser, subs, superior court of justice

Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only.   If you need legal advice on your agreement of purchase and sale or on the deposit specifically, you should seek professional assistance (e.g. make a post on Dynamic Lawyers).  We have Toronto, Ottawa, Hamilton, Brampton, Mississauga and other Ontario lawyers registered to review your agreement of purchase and sale or the deposit and advise accordingly.

At any time before a buyer can make an offer to purchaser property, they must sign a “Buyer Representation Agreement” with the brokerage. This is required by s. 14 of the Code of Ethics (Ont. Reg. 580/05) made under the Real Estate Business and Brokers Act, 2002. This agreement gives the brokerage the exclusive and irrevocable authority to act on behalf of the buyer for a set period of time.  At the same time, the buyer represents and warrants that they are not a party to another buyer representation (or similar) agreement. The Buyer Representation Agreement helps protect the brokerage by guaranteeing that they will get paid their commission even if the buyer engages another brokerage during the time period covered in that agreement.

Worth mentioning is that a buyer may be personally liable to pay some or all of their own brokerage’s commissions if agreed to in the Buyer Representation Agreement. This situation could arise, for example, where the buyer’s brokerage wants more in commissions than what the seller’s brokerage has offered to pay. OREA’s standard form Buyer Representation Agreement states:

“The Buyer agrees to pay directly to the Brokerage any deficiency between this amount and the amount, if any, to be paid to the Brokerage by a listing brokerage or by the seller. The Buyer understands that if the Brokerage is not to be paid any commission by a listing brokerage or by the seller, the Buyer will pay the Brokerage the full amount of commission indicated above”.

A buyer’s Realtor will typically explain this clause and accept what the listing brokerage is offering as their full commission in the Buyer Representation Agreement.

Sometimes, a buyer who signs this agreement will breach it by engaging another brokerage and concluding a deal through them. The problem here is that the buyer had an existing Buyer Representation Agreement with another brokerage and may have lied to their present brokerage by indicating that no such deal existed. The next thing the buyer realizes is that they are being sought after and perhaps even sued by the original brokerage for the commissions that should have gone to them.

Problems can arise where a buyer and a brokerage never sign a Buyer Representation Agreement.  Take the case of Stoicevski v. Nelson, 2007 CarswellOnt 8606. In that case, a buyer engaged Realtor “A” to look for properties on his behalf. No Buyer Representation Agreement was ever signed.  Realtor “A” identified numerous suitable properties, arranged inspections for the buyer, and made various offers on behalf of the buyer (which were never accepted). Four of those failed offers were made in respect of one property and all of them were accompanied by a “Confirmation of Co-operating and Representation” agreement, which indicated that Realtor “A” would receive a commission if a deal went through. The buyer, looking to save some money, engaged Realtor “B” (who would accept a lower commission) to make an offer on his behalf for that property. Using Realtor “B”, the buyer submitted an offer which was accepted. Realtor “A” then sued the buyer for lost commissions. The Ontario Superior Court of Justice found that, even though no Buyer Representation Agreement had been entered into between the buyer and Realtor “A”, the buyer was still liable to pay Realtor “A” the commission owed. The Court reasoned that the buyer’s expectation to pay Realtor “A” commissions if a deal had gone through, coupled with the buyer’s actions – namely, working with Realtor “A” (both generally and specifically with respect to the property that was ultimately purchased) and then engaging Realtor “B” to save money – constituted an unjust enrichment. This case demonstrates that, in these circumstances, the absence of a Buyer Representation Agreement may nevertheless make a buyer who engages multiple Realtors liable for commissions owed.

Overall, if a buyer is looking to get out a buyer representation agreement without the headache of litigation, they should get a written release of liability from the Realtor. Assuming this release is obtained and entered into properly, it should prove to be a good defence in case litigation arises thereafter.

written by admin \\ tags: agreement states, brokerage, buyer representation agreement, code of ethics, commissions, estate business, irrevocable authority, period of time, purchaser, Real Estate, realtor, time period

As an Ontario homeowner wishing to sell your property, you will likely ask your Realtor to list it (among other things). Much of the discussion of listing the property revolves around the appropriate listing price.  Here, the Realtor will generally conduct a comparative market analysis. He or she will look up comparable homes in the nearby neighbourhood that sold recently. Based on that data, the Realtor will recommend a listing price. This is a cursory valuation and, for a formal valuation, a professional appraiser may be engaged. That being said, it is relatively rare to see professional appraisal for residential homes given the cost, time and effort involved.

From here, the seller and the listing brokerage enter into a Listing Agreement.  This is a written contract between the seller and the listing brokerage that sets out most of the duties and obligations of the relationship. It includes how the listing brokerage will market the property and how much they will be paid for their services.

The Listing Agreement will either be a Multiple Listing Service Agreement or an Exclusive Listing Agreement. Most people enter a Multiple Listing Service Agreement, since all member Realtors of the local real estate board receive information about the listing and are entitled to share the commission if they bring a purchaser to buy the property. This is often the most effective way to sell a home.

An Exclusive Listing Agreement means your home will only be offered to prospective purchasers through the brokerage that you list the property with. Other Realtors are not automatically entitled to a commission if they bring a buyer, unless your brokerage agrees to co-operate with them. This approach may take longer to find an interested purchaser.

Note that the Listing Agreement will generally include a clause requiring the seller to provide the listing brokerage with an exclusive and irrevocable right to act as the seller’s agent for a set period of time called the “Listing Period”. If that period of time exceeds 6 months, the listing brokerage must obtain the seller’s initials for the agreement to be effective during that period. The seller is required to pay the brokerage a commission (either a percentage of the sale price or a fixed fee, but not both) for any valid offer to purchase the property from any source whatsoever obtained during the Listing Period. The seller is also liable to pay the listing brokerage full commissions after the expiration of the Listing Period and within a certain negotiated time. This period is called a “Holdover Period” and typically ranges from 60 to 120 days. If an Agreement of Purchase and Sale is entered into during this Holdover Period between the seller and a purchaser introduced to the property from any source whatsoever during the listing period or shown the property during the Listing Period, then the seller is liable to pay full commissions to the listing brokerage.

After the Listing Agreement is signed, the Realtor will list the property, engage in other marketing initiatives to sell the property, and host open houses. Be sure to discuss various other forms of advertising your property – such as placing ads in newspapers and magazines, posting online classifieds, and designing and distributing brochures, flyers, and greeting cards – (and who bears the cost) with your Realtor as soon as practical.

Once a written offer has been made, the Realtor presents it to the seller and explains the terms and conditions therein. The Realtor will generally discuss negotiation strategy and proceed to negotiate the terms and conditions on the seller’s behalf.

After the property has been sold conditionally or if a firm sale has been reached (i.e. if there are no conditions), the seller’s Realtor will retrieve the deposit from the purchaser’s Realtor (if applicable) and try to ensure that that all conditions are satisfied and waived.

This generally concludes the Realtor’s involvement in helping a seller.  From here, the Realtor will forward a copy of the Agreement of Purchase and Sale to the seller’s lawyer, who gets involved to close the deal.

written by admin \\ tags: brokerage, local real estate, member realtors, multiple listing service, period of time, professional appraisal, professional appraiser, prospective purchasers, purchaser, real estate lawyer, realtor, relationship, toronto real estate

A real estate transaction in Ontario begins with an offer to purchase property which, if accepted, becomes a binding and legally enforceable contract. The offer is usually done using the Ontario Real Estate Association‘s standard form Agreement of Purchase and Sale. The offer contains various terms and conditions – some of which must be satisfied in order for the deal to close (e.g. financing, home inspection, etc.).

In this blog, I’ll be discussing the stages of buying and selling real estate in Ontario after the Agreement of Purchase and Sale has been accepted.

Document Preparation and Review
After the Agreement of Purchase and Sale is completed, the buyer and seller’s lawyers begin a phase of document preparation and review. Such documents include the transfer, a statement of adjustments, directions, undertakings, affidavits, declarations, and supplementary agreements.  The purchaser’s lawyer will conduct searches on the title, the property to be transferred (as well as adjoining properties in certain situations), and the seller(s).  Based on these searches and other inquiries, the purchaser’s lawyer will send requisition letters to the seller’s lawyer to address any issues that may arise. The lawyers will also explain to their respective clients their rights and obligations and have them sign off on a number of these documents.

Closing
On closing, when the seller’s lawyer is satisfied that he or she has obtained all that is required (including the outstanding funds owed), they will transfer title and mortgage (if applicable) and arrange for the keys to be delivered to the purchaser’s lawyer.

Post-Closing
Post closing, the purchaser and seller’s lawyers will notify relevant government offices and utilities in the change of ownership, disburse funds as required to third parties (e.g. brokerages) and the seller, and follow up on any undertakings they provided. The lawyers will also prepare reporting letters to their clients, which detail the transaction, and render a bill for legal services.

written by admin \\ tags: affidavits, brokerages, change of ownership, declarations, document preparation, enforceable contract, financing home, government offices, home inspection, ontario real estate, ontario real estate association, purchaser, real estate in ontario, real estate lawyer, real estate transaction, relevant government, requisition, supplementary agreements, toronto real estate

Toronto law firms can help answer your legal questions, facilitate your transaction (e.g. business, real estate, wills and estates, family, etc.) or even represent you in court.  To find a Toronto lawyer or law firm, go to Dynamic Lawyers and make a post.  It’s free and anonymous and Toronto lawyers and law firms will respond to you with information and quotes for you to compare.

Here are some of the different types of law that Toronto law firms can assist you in:

• Accidents and Injuries: Involved in an accident where you suffered personal injury?
• Business: Need corporate or commercial agreements? Need to have a lawyer help you do a transaction?
• Charities and Not-For-Profit: Need to establish a Not-For-Profit corporation or obtain charity status?
• Civil Litigation – Higher Court: Have a serious legal claim that needs to be litigated in the Superior Court, Divisional Court, etc.?
• Civil Litigation – Small Claims Court: Have a legal claim (e.g. breach of contract, negligence, etc.) for less than $10,000?
• Constitutional / Human Rights and Freedoms: Challenging a law or government action / inaction?
  Criminal: Charged with a criminal offence? Appealing a conviction?
• Employment and Labour: Need an employment agreement? Unjustly terminated? Need to know your rights?
• Family: Going through a separation or divorce? Fighting to get custody or access? Dealing with spousal and child support?
• Government: Need to lobby the government? Need to resolve a dispute with a government agency?
• Highway Traffic Tickets: Charged with speeding or DUI? Need to fight traffic tickets?
• Immigration: Need to immigrate to Canada? Fighting against deportation?
• Insurance: Having difficulties with your Insurance company?.
• Intellectual Property: Need to register a copyright or trademark? Need help with a patent?
• Landlord and Tenant: Need a resolve a dispute? Need to know your rights?.
• Notary Public / Commissioner: Need to notarize or commission your documents?
• Real Estate: Need someone to facilitate your residential or commercial purchase, sale, or lease?
• Tax: Need help structuring your tax affairs? Need help resolving tax disputes with the Canada Revenue Agency?
• Wills, Estates and Trusts: Need a will? Need to update your will? Find out why having an up-to-date will is a must.

Try to consult with a couple of Toronto law firms and Toronto attorneys until you’re comfortable with whom you’re speaking with.  Toronto law firms differ in size, location, expertise, and reputation.  Go to Dynamic Lawyers and save time and money finding the right Toronto law firms and Toronto attorneys who specialize in the legal area you require!

written by admin \\ tags: accident, accidents, agreement, attorneys, breach, breach of contract, charity status, Civil Litigation, commercial agreements, commissioners, company intellectual property, contracts, conviction, corpor, corporation, court, criminal, criminal offence, custody, different, different types of law, divisional court, family, firms, government need, human rights and freedoms, injuries, injury, insurance, landlord and tenant, law, lawyer, lawyers, legal claim, litigants, litigation, money, negligence, notarize, notary, offence, publicity, purchaser, quotes, separation, small claims court, support government, toronto, toronto law firms, toronto lawyer, toronto lawyers, traffic, types of law, Wills and Estates

Please note that the information provided herein is not legal advice and is provided for educational purposes only.   If you need legal advice, you should seek professional assistance (e.g. make a post on Dynamic Lawyers).

A friend recently asked me: “What are the legal ramifications when I purchase something that doesn’t work for the purpose which I bought it for?  Take for example, the case of an explosion proof refrigerator.  What if it failed to protect people and things on the outside from the dangerous contents on the inside?”

Now that may be an extreme and unfortunate example, I thought.   But nevertheless, I thought it would be worthwhile to dissect his question and outline some general thoughts here..

As I understand it, the purpose of an explosion proof refrigerator is generally twofold:  (1) to protect the internal contents from external explosions and (2) to protect external things, people, etc. from internal explosions.  If the explosion proof refrigerator fails to do either or both of these things, then injuries, damages, and losses may result.

In these situations, a person may claim, in addition to other things, that the manufacturer of the explosion proof refrigerator: (1) breached the contract of purchase and sale with the buyer or (2) was negligent in manufacturing the explosion proof refrigerator.   In the former case, the contract should be examined to see what exactly was bargained for.   Sometimes, the contract (particularly in the fine print) will specify that consumer protection statutes are inapplicable.  Consumer protection statutes are generally designed to allow people to raise claims that the product they purchased did not meet the purpose for which it was purchase.  If the contract, however, specifically excludes the application of such statutes, then claims and relief through them would generally not be available.

With respect to negligence claims, it’s safe to say that the manufacturer owes a duty to the ultimate purchaser of the explosion proof refrigerator to take reasonable care in the way in which it manufactures such refrigerators. The manufacturer will be held to the standard of care of a reasonable manufacturer in the same industry following industry standards (i.e. with respect to safety, testing, design, etc.).  Hence, if the specific manufacturer failed to live up to that standard of care, it could be liable if the ensuing damages from the defective explosion proof refrigerator were caused by its negligence, those damages were reasonably foreseeable as resulting, and no viable defence (e.g. contributory negligence) is available.

Also worth mentioning is that advertisements in respect of the explosion proof refrigerator should  be examined to determine if they claimed that the product was suitable for something which turned out to be false.  In these case, a claim for misrepresentation (either innocent, negligent, or fraudulent) may also arise.  Claims for misrepresentation are generally based on false statements that induce one party to take action or refuse to take action and which causes injury or damage.

written by admin \\ tags: breach of contract, breach of statute, consumer protection, damages, educational purposes, explosion proof, internal contents, internal explosions, lawyers, legal advice, legal analysis, legal ramifications, losses, misrepresentation, negligence, negligence claims, professional assistance, purchaser, refrigerator, unfortunate example

SEO or Search Engine Optimization refers to the ability to make your website rank high on search engines for your selected keywords.  It’s part art, part science.  There are hundreds of variables at play here and people have devoted their businesses and lives to mastering the techniques to be in the top spots on Yahoo! and Google.  So here are a few things I picked up in the past 48 hours while looking into SEO for Dynamic Lawyers:

1. Pick the right keywords. You can use tools like the Internet Business Promoter to figure out what keywords are being used by competitors.  Also, Google has a section in their Ad Words website that gives you keyword ideas.  Finally, WordTracker is the leading authority on keyword searches.
2. Target the hell out of your keywords. Strategically place your keyword in your domain name or URL, text, meta tags (discussed below), picture files, h1 tags (discussed below), etc.  Make sure to try to have a low-keyword density (i.e. the number of times your keyword appears relative to the rest of the text on the page should be relatively low) or else search engines will penalize you!
3. Use titles, meta tags, and h1 tags. Titles are what appear at the top of the browser and should explain in a nutshell what the page is about.  Meta tags are behind the scene keywords and description of the page.  Be careful not to put too information here because search engines may penalize your website if the meta tags are not accurately reflected in the actual text of the website.  Some search engines, however, ignore meta tags.  Finally, use h1 through to h6 (heading tags) for your text so that search engines will believe the words that are categorized this way are important.
4. Backlinks. Have as many links from popular, high quality websites linking to your website.
5. Have a sitemap and robots.txt file.   These files allow search engines to understand the layout of your website and also to search through the pages.
6. Submit your website to search engines. You can purchase software that will submit your optimized website to search engines around the world either automatically or semi-automatically.
7. Content, Content, Content! Search engines love blogs, forums, and articles that are constantly updated.  These things tend to be SEO compliant, so make sure you contribute regularly to them.
8. Have a great CSS template. A CSS or Cascading Style Sheet is a hidden and central web page that contains all the different sytles of text that you may use.  Without a CSS, you would need to change the text style of every page yourself, which is a big waste of time.  Changing a central file that contains all the styles is much easier and allows for quicker loading (because you won’t have all the code on every page).
9. Avoid Broken Links! Search engines hate broken links, so make sure you don’t have any.
10. Evaluate and Adjust: You can purchase web analytics software to monitor your progress (e.g. visitors, pages, keyword searches, time spent on pages, most popular pages, and much more) and make adjustments.

At the end of the day, it takes a lot of patience and effort to be in the top spot on major search engines.  You need a strategy and you need dedication.  But, at the end of the day, when it pays off, you’ll have an SEO website that is the envy of the Internet.  Happy SEOing.

written by admin \\ tags: avoid broken lines, blog, content, CSS template, evaluate and adjust, google, h1 tags, keywords, lawyer, Lawyer Websites, lawyers, major, meta tags, optimization, purchaser, rankings, robots.txt, search engine backlinks, seo, sitemap, titles, variables, yahoo

As with lawyers, the end of Realtors is often prophesized through the advent of sell-by-owner websites that cut out the 6% commission which Realtors and brokerages charge for a typical transaction.   The idea behind the website is simple: allow owners and sellers to negotiate a purchase and sale agreement for property without involving the middlemen.  This  trend has been ongoing for some time now and there are a number of websites dedicated to squeezing out Realtors, such as For Sale By Owner.

It is interesting to note that although this trend is currently being experienced in its infancy in the legal industry (i.e. where disruptive technologies like Dynamic Lawyers, automated document generation, etc. are making legal services more accessible, affordable, and expedient), there are many difference between Realtors and lawyers which would make Realtors in their traditional form much more obsolete and faster.

To begin, the barriers to entry to becoming a lawyer are much greater than they are to becoming a Realtor (which does not require years spent at university, articling, etc.).  Second, there is a real access to lawyer problem: affordable lawyer specializing in certain legal areas are somewhat hard to find (e.g. Lawyer Referral Service? YellowPages?  Friends and Family?  Who do you turn to?).  There is no such access to Realtors problem: everyone and their uncle knows of a realtor they can turn to in order to sell their home or help them buy a new one.  Moreover, Realtors spend an exuberant amount of money advertising their services in a cut-throat market.  Third, lawyers must often specialize in certain complicated legal areas which take years of experience and know-how to develop expertise in.  For the most part, all Realtors can provide the same basic services – whether it be assisting clients in buying, selling, or leasing a home, commercial office, farm, etc.  If there is specialization in the real estate industry, it is likely confined to geographic areas and types of homes; this doesn’t take away from the fact that all Realtors are capable of doing the same thing (i.e. filling in paperwork, negotiating, and finalizing a deal).  These three differences reveal that lawyers – particularly those who specialize in a complicated legal area such as tax litigation or commercial law – are and will continue to be in high demand and, as such, safe and secure from disruptive technologies that will take business away from other types of lawyers.

Overall, given the low barriers to becoming a realtor, the market prevalence and accessibility to Realtors, and the fact that they can all pretty much perform the same services to assist clients, I envision the end of traditional Realtors happening on a wider scale much quicker than it would for traditional lawyers.

written by admin \\ tags: agreement, continuings, end of realtors, end of s, for sale by owner, lawyer, lawyers, litigants, litigation, money, negotiating, Negotiations, purchaser, referrals, technology, Toronto lawyer Michael Carabash