This is the Warranty paragraph:
“7. WARRANTY: The Seller represents and warrants that the Seller has the exclusive authority and power to execute this Authority to offer the Property for sale and that the Seller has informed the Listing Brokerage of any third party interests or claims on the Property such as rights of first refusal, options, easements, mortgages, encumbrances or otherwise concerning the Property, which may affect the sale of the Property.”
Review
Set out below and marked in bold and italics are those words that are inserted by me to assist in the review. They are not set out in the clause itself. Let’s look at that paragraph in a little more detail:
7. WARRANTY:
Authority to Sell
The Seller represents and warrants that the Seller has the exclusive authority and power to execute this Authority to offer the Property for sale and that
Interests and Claims
the Seller has informed the Listing Brokerage of any third party interests or claims on the Property such as
- rights of first refusal,
- options,
- easements,
- mortgages,
- encumbrances
- or otherwise
concerning the Property,
which may affect the sale of the Property.
COMMENT
This warranty provisions first starts with authority to sell. In the case of an Estate sale, it may very well be that the Seller is asking that question of the Listing agent, rather than the other way around.
If the deceased was testate, then the property could immediately be listed by the Estate Trustee. On the other hand, if the deceased was intestate (had no Will), then, it is necessary to wait until a Certificate of Appointment of Estate Trustee without a Will has been granted.
The list of disclosures seems rather peculiar. Shouldn’t the presence of a residential Tenant be extremely important? Maybe, they won’t move, or require a “cash for keys” arrangement? Some easements are major and others are minor. What about taxes? If they are in substantial arrears, then, this could result in a “tax sale”. Also, what about “executions” that have been filed or are ready to be filed against the title? They could result in a judicial sale of the property. There may be significant encroachments. Depending upon the application of the rules of adverse possession and prescription, they could be either temporary or permanent.
Brian Madigan LL.B., Broker