Can a Buyer walk away from a conditional offer with a standard OREA inspection condition (for the benefit of the Buyer and Buyer’s sole and absolute discretion) without giving the Seller an opportunity to remedy any deficiencies? The Seller has refused a price reduction.
Additionally, can a Seller and the Listing agent demand to see the inspection report and refuse to sign the mutual release?
Answer:
Prior to Bhasin v. Hrynew (14 November 2014)the answer was “yes”, it was a free walk. That’s no longer the case. There is an obligation of “good faith contractual performance”. The inspection condition must be exercised in “good faith”. It’s not a weasel clause.
If there are serious concerns about the house, then, a Buyer can walk away. But, if it’s just Buyer’s remorse, then “no”, they can’t, they are stuck.
While the Inspection Report belongs completely to the Buyer and they have no obligation whatsoever to share it (until the lawsuit, then, they automatically have the obligation to share it), it might be the best evidence of “good faith”.
If you are the Listing agent, or the Seller, you may not want to see the inspection report. You may have duties under TRESA which you didn’t have before. So, get your lawyer to review it, and arrive at the appropriate decisions. They are not affected by TRESA and continue to owe fiduciary obligations to the Seller. As Listing agent, you don’t want to know.
Brian Madigan LL.B., Broker
Comments 2
WHAT IF IN CASE OF MORTGAGE CONDITION AND THE BUYER WALKS AWAY WITHOUT NOTICE AND NO WAIVER OR MUTUAL RELEASE SIGNED
Author
Let’s assume, that the Buyer actually did qualify or was reqjected by one Bank, but never applied anywhere else. This would be bad faith on the part of the Buyer and the Seller gets to keep the deposit, re-list the property and if the sell for less money then they can sue for the deficiency (after applying the deposit) and the additional costs and expenses.