Expanding the Description of the Property in the Agreement

Question:

A number of years ago, properties seemed to include additional references like: “having a private driveway” “a mutual driveway” a laneway” a right of way” “front yard parking” or “no parking onsite.”

That practice appears to have essentially disappeared. Should we be going back to the old system?

Answer:

The Forms have changed over time. There was certainly a time when you could write in “two storey house with detached garage backing onto a ravine”. That was in addition to the municipal address and legal description.

Now, on many occasions that type of description is simply too long. You have no room, the extra line or two was deleted. So, you add it if you want it to be included in Schedule “A” or another Schedule to the Agreement. That’s the way the OREA Forms are setup at the present time, add additional information through Schedules. In fact, this additional information would have changed the result of many lawsuits over the years.

A Builder developed a Court. One side backed onto a ravine, the other side backed on a municipal road. There were errors made by the Builder with respect to the conveyances, and 5 years later, when one of the first buyers moved, they discovered that their actual Deed showed them to be the Owner of the property located across the street. All the homeowners had to convey title to their neighbours and all the mortgagees had to sign off. This entire process took 14 months. It was caught since a Buyer’s lawyer saw the “backing onto a ravine” in the Agrement, otherwise this would not have been discovered.

Parking in Toronto has value. Two spaces are even more valuable. So, if you are on the Listing side, be sure you get the extra value for your client and be sure you know what it is they are selling. There certainly can be issues.

If you are on the buy side, check this out. What are you buying? If you just let the parking issue go and didn’t put anything in the APS, you might find that there was only one space, not two, and the City is not prepared to renew the permit etc.

In both cases, the approach might be slightly different, however both agents are to act in the best interests of their respective clients and investigate, determine and verify the material facts.

The additional words wherever they appear in the Agreement are helpful from the perspective of the Buyer. It is to add clarity. What if the legal description is wrong or incomplete or not carried forward in its entirety into the Agreement.

A property in Muskoka consisted of two parts on a Reference Plan. Part 1 was a small island out in the lake, about 85 ft. long and about 15 ft. wide. Part 2 was a cottage on a hill overlooking the lake. The sale of the property took place at $1 million. On the Agreement of Purchase and Sale there was only a statement in the description about Part 1. No statement whatsoever referenced Part 2.

The Court concluded that the Buyer was to receive only the island for $1million. The additional property on the hill was not included. The Court only looked at the numbers. However, what if the description of the property had also stated “cottage on the hill including island in the lake”. We still have uncertainty, but we now have an opportunity to introduce evidence at Trial that it was the intention of the parties to include both Parts 1 and 2. Otherwise, the Listing Agreement could not be introduced.

At the moment, real estate agents are commonly only specifying the numbers. If that’s the case………then, those numbers better be right.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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