Blog Articles

Especially in today’s rising interest rate environment, it’s not always easy to sell a house. Negotiations occasionally fall through even after a contract has been signed. Therefore, it’s essential to hire a real estate lawyer to review and draft legal documents, explain your purchase and sell agreement, look out for your best interests and represent you during the transaction. The reputable lawyers at Bernard Lau and Co. will advise you on your legal rights and obligations under the purchase agreement.

Reasons a Buyer May Withdraw from a Transaction

Buyers might back out of real estate transactions for a number of reasons, including:

• Financing problems: Unforeseen changes in buyers’ financial circumstances, like job losses or significant decreases in income, can lead to collapsing transactions.
• Property issues: During inspections, buyers may discover issues with the property. These can include structural, mechanical or environmental problems such as oil tank discoveries.
• Market conditions: Buyers may reconsider the purchase due to market conditions. For example, if the market has cooled, buyers may no longer want to purchase the property at the agreed-upon price as they may suffer from buyer’s remorse.
• Cold Feet: Buyers can get nervous about making large purchases and back out of the transaction for unrelated or unforeseeable reasons.
• Better deals: If buyers find a property they prefer to the one they’re contracted to purchase or find a similar property at a lower price, they may try to terminate the contract.

How to Protect Yourself During a Real Estate Transaction

There are a few ways sellers can protect themselves in case of or reduce the risk of collapsing transactions. They include:

Requesting a deposit

Requesting a deposit or earnest money from the buyer can protect you from potential financial losses if they back out of the transaction. You can use the deposit as compensation for costs incurred during the transaction or any losses that may arise due to the transaction falling through. You may even ask for the deposit to be paid directly to you as the seller, or ask the buyer to increase the deposit, although be careful asking for too much – too large of a deposit may not be enforceable.

Keeping detailed records

Maintain detailed records of all correspondence and transactions between you and the buyer and his realtor. These records can include emails, text messages and other forms of communication. If a dispute arises, they can help resolve the issue by giving clarity to the circumstances that precipitate a collapsing transaction and sufficient evidence may also deter a buyer from considering backing out of the transaction if it’s clear that he had no legitimate grounds for doing so but simply changed his mind.

Be honest

Buyers may often try to back out of a contract by claiming that the seller was not truthful to him in describing the property by playing down certain risks or even outright lying about the condition of the property. Oftentimes, a seller’s best defence is to be honest about the state of the property and to respond truthfully if any concerns from the buyer are raised. That being said, a seller usually has no obligation to disclose absolutely everything that he knows about the property due to the principle of caveat emptor (or buyer beware). Sellers have an obligation to disclose latent material defects but it can be tricky to know what constitutes such a defect that must be disclosed. Consult with your lawyer if you are unsure about whether certain disclosures are necessary.

Contacting a lawyer

You should immediately seek legal advice if a buyer backs out of the transaction. An experienced property law lawyer can guide you through the legal process and ensure your rights are protected. They can also help you navigate the dispute resolution process and represent your interests in negotiations or court. Furthermore, they’ll identify and mitigate legal risks arising from the transaction.

Are You Looking for a Real Estate Lawyer in Richmond and Metro Vancouver, BC?

If you’re a property seller dealing with a collapsing transaction, contact Bernard Lau and Co.

Our experienced lawyers will review your purchase agreement and all communication between you and the buyer. They will explore all options to get the transaction back on track and protect your interests if it falls through.

Call us at 604.285.5240 or fill out our contact form to schedule a consultation.

The content on this website is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this website are advised to seek specific legal advice by contacting members of Bernard Lau and Co. (or their own legal counsel) regarding any specific legal issues. Bernard Lau and Co. does not warrant or guarantee the quality, accuracy or completeness of any information on this website and should not be relied upon as being proper, accurate, timely or fit for any particular individual’s own circumstances other than for educational purposes.
Accessing or using this website does not create a lawyer-client relationship. Although your use of the website may facilitate access to or communications with members of Bernard Lau and Co. via e-mail transmissions or otherwise via the website, receipt of any such communications or transmissions by any member of Bernard Lau and Co. does not create a lawyer-client relationship. Bernard Lau and Co. does not guarantee the security or confidentiality of any communications made by e-mail or otherwise through this website.

It can be exciting when as a buyer, your offer to purchase your dream home is accepted. However, that excitement can turn into frustration, anxiety and fear if the seller changes his mind and decides no longer to hold to his end of the bargain to complete the transaction. Although there are various legal remedies available to innocent parties in collapsing transactions, figuring out what to do when a transaction fails can be exhausting, frustrating and fraught with risk. When the seller doesn’t comply with the terms of your agreement, it’s extremely important that you immediately obtain legal advice to evaluate the situation carefully before deciding on the next step. The timely hiring of a lawyer with experience handling collapsing real estate transactions can help ensure that your legal rights are protected during this critical period.

Why Would a Seller Back Out from a Transaction?

A seller might back out of a real estate transaction because they:

• changed their mind about selling the property;
• receive a better offer from another buyer;
• encounter financial difficulties preventing them from completing the sale;
• learn that the property has unexpected problems or defects they don’t want to fix, or
• have other personal reasons that prevent or discourage them from completing the sale.

How Can You Protect Your Interests During a Real Estate Transaction?

There are some general steps you can take in the event of a collapsing transaction. They include:

Reviewing the terms of the sale

Before signing the agreement, thoroughly read each page and seek legal advice from a real estate professional to safeguard your interests. Check the terms of the sale agreement to see if there are any provisions for what happens in the event of collapsing transactions. Make sure you understand the legal rights and obligations of both parties to the contract so that you’re aware of what you are entitled to, and what you are obligated to do. Reviewing the contract with a lawyer ensures that the contract reflects what you agreed on and so you won’t be caught off-guard.

How Can a Lawyer Safeguard Your Interests During a Real Estate Transaction?

Filing a lien against the Property

If you have a valid contract and you insist on purchasing the property, one of the first steps you should discuss with your lawyer is preserving the property so that it is not simply sold or transferred to somebody else. Your lawyer may advise you to file a lien known as a Certificate of Pending Litigation to freeze the property and alert other parties that the property is tied up in litigation. This can help ensure that until the dispute is resolved, the property will remain available and under the seller’s name so that hopefully, the transaction may continue in the future.

Suing for specific performance

In addition to filing a lien, you as a buyer may also ask for a remedy known as “Specific performance”. This is a remedy that a buyer may ask for when a seller refuses to complete a contract but insist that the seller carry out his performance of the contract. The idea behind the specific performance is that monetary compensation for a particular breach of the contract won’t always be sufficient. After all, if it’s your dream home, you may not be able to find a replacement so easily. However, specific performance is not easily granted so your lawyer should assess whether there are good grounds to claim this as a remedy.

Suing for damages

Damages that the buyer incurs due to the seller’s breach of contract or misrepresentation may be claimed by the buyer. Damage claims may include expenses such as closing costs associated with the failed transaction, moving and storage costs, additional property or rental costs, interest due or lost because of the breach and professional fees. Your lawyer will be able to consult you for the different types and quantum of damages that you may claim, some of which may not be so immediately obvious.

Seeking legal advice

If you’re concerned about protecting your legal rights under a collapsing transaction, seek legal advice from a qualified lawyer. They can help you understand your rights and advise you on the best actions.

Are You Looking for a Real Estate Lawyer in Richmond and Metro Vancouver, BC?

If you bought a property and are dealing with a collapsed transaction, contact us at Bernard Lau and Co.

We can advise you at every stage of the transaction, from negotiating the details of the contract of purchase and sale to settling disagreements during closing.

Call us at 604.285.5240 or fill out our contact form to request a consultation.

The content on this website is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this website are advised to seek specific legal advice by contacting members of Bernard Lau and Co. (or their own legal counsel) regarding any specific legal issues. Bernard Lau and Co. does not warrant or guarantee the quality, accuracy or completeness of any information on this website and should not be relied upon as being proper, accurate, timely or fit for any particular individual’s own circumstances other than for educational purposes.
Accessing or using this website does not create a lawyer-client relationship. Although your use of the website may facilitate access to or communications with members of Bernard Lau and Co. via e-mail transmissions or otherwise via the website, receipt of any such communications or transmissions by any member of Bernard Lau and Co. does not create a lawyer-client relationship. Bernard Lau and Co. does not guarantee the security or confidentiality of any communications made by e-mail or otherwise through this website.

When buying a home, one of the most important legal steps is for your lawyer to ensure who holds title to the property. This title verification is often done by way of a title search, and can be certified by a document known as the State of Title Certificate, which is simply a certified copy of the title search. In short, property ownership, whether commercial or residential, can be proven by a title or a state of title certificate. A real estate lawyer can confirm legal ownership by conducting a title search on your behalf so that the registered owner is consistent with the name of the seller on any contract of purchase and sale for that property. Sometimes the legal name on a title search may not always correspond with that owner having beneficial ownership of the property, such as in the care of a bare trust relationship, but that is beyond the scope of this article and you should obtain independent legal advice on this issue if you have any concerns.

What Is a Title?

A title shows the legal rights of ownership of real property consisting of land and buildings on the property. In simple terms, having title often provides the title holder with a bundle of rights, including:

Conveyance rights: This refers to the transfer of title or ownership of property from one person (the seller) to another (the buyer).

Disposition or collateral rights: The title holder often has a right to refinance, gift or transfer ownership of their property to someone else.

Exclusive use: The property owner is often entitled to utilize, occupy and enjoy the property or to allow others to do the same.

Types of Title

A title can be held by one or several persons. A single owner will hold sole title. However, multiple owners who hold title to the same real property can be categorized as either joint tenancy or tenancy in common.

Joint tenancy
Joint tenancy refers to two or more individuals who hold an equal percentage of interest in a property. Their title rights are equally shared. If an owner dies, the property in many cases, will transfer to the surviving joint owners.

Tenancy in common
Tenancy in common allows two or more people to hold equal or unequal percentages of legal ownership in a property. If one tenant in common owner dies, that share passes in accordance with the deceased’s Will or under the laws of intestacy if there is no Will, rather than automatically to the other surviving owner.

A real estate lawyer can advise you on your property ownership rights and discuss with you some of your options to hold title. Remember, title can be a complicated legal issue and the name you see registered on a title search may not always equate to that individual or company actually holding the beneficial ownership of that particular property, such as in the case of a trust relationship that may not be visible in a title search. Accordingly, if you have questions or concerns about title, it is best that you consult with a legal professional to examine title on a case by case basis since each set of circumstances behind title ownership are unique.

What Is a State of Title Certificate?

A state of title certificate is a certified copy of the title usually issued by the province or the land title office. This legal document identifies the legal owner of that property. The certificate lists key identifiers, including the property’s legal description and parcel identifying number (PID), the legal owner(s) name and mailing address, and any outstanding liens or encumbrances.

Real Estate Lawyer in Richmond, BC

Bernard Lau and Co. would be happy to provide legal advice on real estate law or if you have any questions about title ownership.

Call us at 604.285.5240 or complete our contact form to schedule a consultation.

The content on this website is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this website are advised to seek specific legal advice by contacting members of Bernard Lau and Co. (or their own legal counsel) regarding any specific legal issues. Bernard Lau and Co. does not warrant or guarantee the quality, accuracy or completeness of any information on this website and should not be relied upon as being proper, accurate, timely or fit for any particular individual’s own circumstances other than for educational purposes.
Accessing or using this website does not create a lawyer-client relationship. Although your use of the website may facilitate access to or communications with members of Bernard Lau and Co. via e-mail transmissions or otherwise via the website, receipt of any such communications or transmissions by any member of Bernard Lau and Co. does not create a lawyer-client relationship. Bernard Lau and Co. does not guarantee the security or confidentiality of any communications made by e-mail or otherwise through this website.

Buying a house is one of the biggest investments you will make in life. Whether it’s your first home purchase or your fifth, there are numerous responsibilities that come with a newly bought home.

While it may feel overwhelming – as well as exciting – it’s important to ensure that you and your new home are well protected. Although most of us know about fire insurance and homeowner’s insurance to protect our home’s physical structure and personal contents, it’s important not to forget about insurance coverage for our property’s title, which is just as important but more easily overlooked. One of the ways this is done is through title insurance.

What Is Title Insurance?

First, it’s necessary to understand what title insurance is. “Title” refers to the property’s ownership, while “title insurance” is a form of insurance that protects against risks to your title.

Title insurance can oftentimes protect both lenders and homebuyers against loss or damage occurring from illegal liens, encumbrances, or defects in a property’s title. Common claims filed against a title are tax liens, builder’s liens, certificates of pending litigation, and encumbrances such as mortgage loans, and home equity lines of credit (HELOC).

It’s essential to learn as much as you can before making such a substantial purchase. When in doubt, don’t hesitate to consult an experienced real estate lawyer about your specific situation. To get you started, here are some of the most significant benefits of title insurance.

Benefits of Title Insurance for the Homeowner

Title insurance can protect you for as long as you own the property. It protects against a number of risks. These risks may include:

Encroachments that would be disclosed by a new survey

For example, title insurance protects you if a neighbour’s deck is being partly situated on your land. Title insurance also covers encroachment issues such as if your backyard shed is actually on your neighbor’s property and must be removed. If the encroachment cannot be removed for safety reasons (such as a retaining wall), then you may need to compensate your neighbour for the encroachment, and title insurance may provide coverage for such costs.

Not having a survey

Although having a survey is advisable, title insurance can offer legal protection in lieu of a survey by transferring any risks that may have been disclosed by a survey, to the title insurer with respect to defects in title and other defects such as encroachments.

Someone other than the homeowner having interest

For example, a previous owner of the property not being properly discharged from title or a previous owner claiming a beneficial interest or unregistered title to the Property.

Liens from contractors, taxing entities or previous lenders

Title insurance can protect homeowners from charges accrued by previous owners. For example, if the former owner failed to pay municipal or school taxes and the tax authorities file a tax lien on title, title insurance may protect the new owner from title defects and unpaid tax liens or assessments. If previous mortgages or charges by lenders of the previous owner remain on title, title insurance may cover the costs associated with discharging these liens from title.

Forgery or fraud

Title fraud, which occurs when a person uses false identification to impersonate you to obtain a mortgage or sell the home without you knowing, is one of the more common risks that can be addressed by title insurance. Such consequences can be devastating and recovery through the Courts or other means without title insurance can be time-consuming, stressful and costly.

Title Insurance vs. Homeowners’ Insurance

Some homeowners assume that title insurance is included within a home insurance policy. Because of this misunderstanding, an alarming number of Canadians today do not have title insurance.

While home insurance may protect homeowners from unexpected circumstances that occur on or against their property or its contents, such as fire or earthquakes, title insurance protects the homebuyer from unexpected circumstances that affect the title to the property, such as financial loss from title fraud or other issues. The title insurance’s coverage is often less tangible and inconspicuous compared with the physical damage that a fire may cause, but the financial consequences of title fraud or a fraudulent mortgage registered against your property may be even more severe.

Fortunately, unlike home insurance, title insurance is a one-time premium that is typically purchased at the same time as the property. However, title insurance can also be purchased by existing homeowners who already own their property.

Are You Looking For a Real Estate Lawyer?

Title insurance can only be purchased through legal professional. If you, or someone you know, is looking for a real estate lawyer or would like more information on ordering title insurance, contact Bernard Lau and Co. Our knowledgeable and experienced team can provide personalized advice on a case-by-case basis.

Call us at 604.285.5240 or get in touch by email at info@bernardlau.com.

The content on this website is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this website are advised to seek specific legal advice by contacting members of Bernard Lau and Co. (or their own legal counsel) regarding any specific legal issues. Bernard Lau and Co. does not warrant or guarantee the quality, accuracy or completeness of any information on this website and should not be relied upon as being proper, accurate, timely or fit for any particular individual’s own circumstances other than for educational purposes.
Accessing or using this website does not create a lawyer-client relationship. Although your use of the website may facilitate access to or communications with members of Bernard Lau and Co. via e-mail transmissions or otherwise via the website, receipt of any such communications or transmissions by any member of Bernard Lau and Co. does not create a lawyer-client relationship. Bernard Lau and Co. does not guarantee the security or confidentiality of any communications made by e-mail or otherwise through this website.