Opinions
 | Buyer beware! |
Over the past couple of years, I’ve received a number of calls from clients who all seem to have the same problem – something is wrong with their new house. So, I thought this would be a good time to write about what happens after you buy a house.
For most people looking to buy a house, their sole focus is finding the perfect house. Once they find it, their sole focus is getting that house. A couple of years ago, when the real estate market was extremely competitive, this often meant that many potential buyers were disregarding the normal steps that most prudent buyers would take when they had the time to do more than get into a bidding war.
One of the main casualties of the extremely competitive market we saw a couple of years ago was the house inspection. Many buyers were afraid to put down “satisfactory house inspection” as a condition of their offer because they knew that there was someone out there who would not put down any conditions on their offer and as a result they would lose their chance at the house. So, what did buyers do? They gambled. They submitted their Offer to Purchase without the home inspection condition. Although the real estate market is not as hot and as competitive as it was a couple of years ago, the lessons of the past should still serve as a reminder to today’s potential buyers.
Imagine this scenario. You spend weeks looking at houses and have already faced the heartbreak of being outbid on several houses that you just loved. Finally, you find a house that you know you just must have. But there are several other buyers looking at the property. You don’t have enough time to find an inspector to take a quick look at the house for you. What do you do? Do you submit the offer with the house inspection as a condition or do you gamble and pray that everything is fine with the house and just submit your offer. If you decide to gamble, remember this: the law says that you are entitled to take possession of the house in the same condition it was in on the day you made your offer. This means that if there’s something wrong with the house and you never made any effort to determine what, if anything, was wrong, you are not entitled to cry foul afterwards.
Based on the various files I have seen over the years, I have found that buying a house is truly a gamble. Some will luck out with Vendors who will bend over backwards to help you adjust to your new home. They leave notes with instructions on how everything works and some even leave house warming gifts. Others find a nightmare scenario when they take possession of their “dream” home. Some Vendors are extremely inconsiderate and leave the property dirty, with garbage everywhere and sometimes appliances are missing or simply don’t work at all. If you find yourself in this nightmare scenario, what do you do?
If there is anything wrong with the house once you take possession, your first step should be to document what is wrong. Take pictures, videos and detailed notes of the state of the house. If the issue is minor, you might want to try contacting your realtor first before your lawyer. The realtor might be able to solve the problem quickly if we are simply talking about missing alarm codes or keys. However, if the issue is more complicated, contact your lawyer. Your lawyer will then contact the Vendor’s lawyer to advise them of the situation. However, what happens next again is a gamble.
There is no law that says the house needs to be clean. It’s simply common courtesy that Vendors take the time to leave a clean house. If, however, appliances are missing or are broken and they were included in the Offer to Purchase, the two lawyers will attempt to work out a compromise. But, buyers need to keep in mind that a lawyer cannot force his or her client to do something. And, there are always two sides to every story. If the Purchaser says that the dryer doesn’t work but the Vendor says it was working perfectly fine the day they left, who is in the right?
Problems arising from a botched possession might be simple to solve – such as finding missing keys or codes. But most are difficult and time consuming and many end up in court. It is a misconception that the legal fees involved with solving problems after you take possession are included with your legal fees for your actual purchase. In actuality, any problems arising after a Purchaser takes possession is not included and will therefore be a separate legal bill. The normal legal fees that Purchasers pay their lawyer are for the preparation of the mortgage, investigation of the title, transfer of the title and all dealings with the bank, credit union, or mortgage company. It does not include dealing with after possession problems. This applies regardless if you purchase a house or if you decide to build a house.
How do you avoid these problems? Obviously, you have no control over how the Vendor will act on or before the possession date. However, you do have control over where you spend your hard earned money. I know that there is a school of thought out there that says just get the house and deal with everything afterwards but I do not agree with this. If you are going to invest that much time, energy and money into a brand new house, you better know what you’re getting into before you sign on the dotted line. If you don’t take the time to properly investigate everything that is within your control, then frankly, you have no one to blame but yourself if something goes wrong. The law will not accept a claim of ignorance. It is the buyer’s responsibility to know what he or she is buying. Unless the Vendor has somehow tricked the buyer into making the purchase or has deliberately withheld important information about the condition of the house, it will be very hard for a buyer to get a favourable court decision. So remember: Buyer Beware.
The content of this article is not intended as legal advice and is for information purposes only. Should you require legal advice on a specific issue relating to the contents of this article, please seek the services of a legal professional.
Alona C. Mercado is a lawyer practicing in Winnipeg with the law firm of Monk Goodwin LLP. She was called to the Manitoba Bar in 1999 and the Ontario Bar in 2003. Her preferred areas of practice include wills and estates, committees, real estate, business and commercial transactions, and immigration law. Alona can be reached at (204) 956-1060 ext. 233 or amercado@monkgoodwin.com.