Assignments and Extensions of the Closing Date (Ontario)
I represent the Assignee in a transaction for a condo under construction.
The original Agreement of Purchase and Sale with the Builder provides for a closing date of June 30th.
The Assignment specifically states that “profits” are to be paid on completion of original Agreement. The closing is now delayed.
Assignor is demanding that his profits be paid on 30 June using the “time is of the essence” clause contained in the Assignment. Is this accurate?
The question here is as follows:
“is the first buyer’s consent necessary to an extension of time for closing under the initial sale agreement?”
The answer here, would be “no”, provided you used the standard Form OREA Assignment Agreement. This naturally begs the further question, “if you are a Seller, should you include additional clauses for your own protection?” And, here, the answer would be “yes”.
The “time of the essence” clause in the second agreement (the assignment) has no bearing on this issue. Extensions and alterations all take place under the original agreement (the purchase). By virtue of the OREA Assignment, full authority to “extend” was transferred by the original Buyer to the new Buyer. That doesn’t need to be the case. The Assignor could have negotiated some input/ money/ restrictions/ consent, but I gather that he did not. So, it’s a little too late now.
The closing on deal #2 was predicated on completion of deal #1. It didn’t have to be, but again, if that’s the deal, then, that’s the deal.
Brian Madigan LL.B., Broker