Question:
Do you always book a “final” walk through with your clients right before closing? If so, how close to closing date?
Answer:
Generally, the evening before, or even the morning of the closing would be ideal. The aim is to be there, after the Seller has vacated so that any damage can be seen. On many occasions damage takes place by the movers. If you wait until after the Buyer’s movers have also been there, it’s challenging to prove the time the damage had taken place.
The generally accepted law in Ontario is set out in Harkness v. Cooney, and that is that a Buyer whether or not it was addressed in the Agreement of Purchase and Sale, has a right to a final inspection. Well more than 99% of lawyers and real estate agent will agree and abide by that decision.
However, there’s always a few who don’t, whether they be Sellers, Listing agents or lawyers, and then the issue is what can you do about it? There are really two choices: 1) nothing, just close the deal and hope for the best, or 2) refuse to close and sue for Specific Performance. Remember, of course, that the first choice was “free”.
Basically, it all breaks down to brinksmanship. If you are a Seller and you need this deal to close, since you need the funds for your purchase which is the same day, then, you will cave. If you are a Buyer and you have given up your place and have nowhere to live and nowhere for your furniture, then, you’ll cave.
What really is needed here is a Buyer who is under no pressure. They won’t be giving up their own residence or they don’t plan to move in right away. That Buyer will insist on their rights. Also, they will have to have the funds to do it and back up their claim. If they are short of cash, the refusal to close is not really an option.
There is no right to holdback any funds for damage. That matter needs to be negotiated or decided by the Courts.
Fortunately, most transactions will accommodate the final inspection, but, there’s always a group of unreasonable Sellers. And, they are probably the same people who exceed the speed limits!
Brian Madigan LL.B., Broker