In the Court of Appeal’s (“ONCA”) recent decision Tribute (Springwater) Limited v. Atif, 2021 ONCA 463 (CanLII) the ONCA clarifies the law regarding damages and mitigation in cases involving aborted real estate transactions. This decision involves an appeal from a summary judgment granting the plaintiff seller damages for the defendant purchaser’s failure to close a residential real estate transaction. Damages The ONCA advises that damages in a failed real estate transaction are generally determined “based on the difference between the agreed sale price under the parties’ agreement of purchase and sale and the market value of the property at the date set for closing”. Depending on context, a court may choose a different date, other than the date for closing. There may also be other damages, such as carrying costs and other expenses incurred by the plaintiff while holding the property for a subsequent sale. Mitigation The ONCA states that … Read More
Latent Defects or Hidden Damage in Real Property Transactions
What Are Latent Defects Or Hidden Damages? Latent defects or Hidden Damage are defects to a property that are not generally discoverable by a prospective purchaser on a reasonable inspection and ordinary vigilance. This can include issues such as, faulty electrical wiring hiding behind the walls or a well-hidden termite or mold problem. Many real estate purchases include a buyer’s right to inspect the property to be purchased. However, these inspections are not exhaustive, and may not reveal latent defects or hidden problems with the property that are not readily visible. Why Do Participants In A Real Estate Transaction Need To Be Concerned About Latent Defects Or Hidden Damage? The problem latent defects or hidden damage can pose for a prospective real estate purchaser is that no amount of vigilance on a visual inspection can uncover such a defect, even one conducted with a home inspector (who’s inspections are typically … Read More