Oftentimes, the issue of a mutual driveway will come up in discussions and sometimes Buyers and Sellers alike will wonder where they stand.
If the title was searched by the Buyer’s lawyer and it was found out the driveway is a mutual driveway and there is no room to park, can the buyer terminate the agreement?
The mutual driveway presents an interesting issue. If the mutual driveway is identified appropriately in the Agreement, then, it’s part of the contract and it would have to be accepted.
If no reference whatsoever is made in the Agreement, then the Title Clause #10 and the Title Search Clause #8 both apply.
The Buyer has agreed to accept “minor easements”, but all of those easements must be related to “services”. The mutual driveway would not fall within that exception.
A requisition calling for a “private driveway” would have to be submitted within the time frame set out in the Title Search Clause. If it is not submitted “in time”, the Buyer is obligated to proceed with the purchase accepting the title as it stands.
If however it is submitted within time that brings us to the next step, which is satisfaction of the requisition.
The creation of a mutual driveway requires the property to:
1) be subject to an easement, and
2) to acquire a reciprocal easement over the adjoining property, so as the two side by side easements create the mutual driveway.
Parking has value and a private driveway has value. That’s probably what was found on title.
Assuming that the requisition was submitted “in time”, then the Seller may:
- Remove the requisition,
- Remedy the requisition,
- Satisfy the requisition, or
- Obtain insurance.
All proposed remedies would have to be acceptable to the Buyer and be available on or before closing.
A price reduction might be satisfactory, if agreeable. An alternate parking location might be acceptable, again, if agreeable. Insurance is not available in this situation.
That still leaves us with the cure. If the Seller bought the other half of the driveway from the neighbour, then, there would be a private driveway.
The next issue is “how soon” could all of that be done?
A Land Surveyor would have to create a Reference Plan. An application to the Committee of Adjustments would have to be made. If the answer were positive, then a Transfer of the property from the neighbour would be provided to the Seller and registered on title. Likely, we are talking about 4 to 6 months. If the closing is more than 6 months away, then this is “doable”.
More commonly, there is not enough time. If the Buyer is agreeable the Seller may offer to complete this conveyance following the closing. This raises certain other issues.
If the Buyer insists that the requisition be satisfied and the Seller is unable to comply, then, Agreement will come to an end. No one is terminating it. Both parties are free to sue one another should they wish to do so. However, it is important to realize that this circumstance will usually resolve itself simply by the return of the deposit.
Brian Madigan LL.B., Broker