Most common law jurisdictions bargain for “good title”, subject to some exceptions.
In Ontario, the standard Form OREA Agreement of Purchase and Sale goes one step further. It lowers the requirement to “insurable title”.
The Buyer agrees to accept title if the Seller can acquire title insurance at the Seller’s expense. It’s no longer the Buyer’s choice. They are stuck with whatever “mess” there may happen to be, as long as the Seller gets the insurance. That doesn’t seem fair.
And, for hundreds of years, the bargain was “good title”, then it moved to “good title subject to some exceptions. Surely, that should be enough.
Here’s the clause:
Highlighted #10
“10. TITLE: Provided that the title to the property is good and free from all registered restrictions, charges, liens, and encumbrances except as otherwise specifically provided in this Agreement and save and except for (a) any registered restrictions or covenants that run with the land providing that such are complied with; (b) any registered municipal agreements and registered agreements with publicly regulated utilities providing such have been complied with, or security has been posted to ensure compliance and completion, as evidenced by a letter from the relevant municipality or regulated utility; (c) any minor easements for the supply of domestic utility or telephone services to the property or adjacent properties; and (d) any easements for drainage, storm or sanitary sewers, public utility lines, telephone lines, cable television lines or other services which do not materially affect the use of the property. If within the specified times referred to in paragraph 8 any valid objection to title or to any outstanding work order or deficiency notice, or to the fact the said present use may not lawfully be continued, or that the principal building may not be insured against risk of fire is made in writing to Seller and which Seller is unable or unwilling to remove, remedy or satisfy or obtain insurance save and except against risk of fire (Title Insurance) in favour of the Buyer and any mortgagee, (with all related costs at the expense of the Seller), and which Buyer will not waive, this Agreement notwithstanding any intermediate acts or negotiations in respect of such objections, shall be at an end and all monies paid shall be returned without interest or deduction and Seller, Listing Brokerage and Co-operating Brokerage shall not be liable for any costs or damages. Save as to any valid objection so made by such day and except for any objection going to the root of the title, Buyer shall be conclusively deemed to have accepted Seller’s title to the property.”
If you don’t like it, then get rid of it.
Brian Madigan LL.B., Broker