Question:
For a variety of reasons we have a situation where the Seller needs to close on the house sale, so that they can purchase their smaller property. Neither have income from work, so they would like to close now, and move out in two weeks. Is that possible?
Answer:
This is an interesting situation. It is coming up more frequently as Banks often do not make bridge financing available to accommodate some of the clients.
You will want to have the issues here dealt with under the Agreement of Purchase and Sale. Avoid the Residential Tenancies Act altogether. The last thing that you would want is the former owner who is now a tenant and occupying the premises as a Tenant entitled to rights under the current legislation.
What you want is a former owner who has breached their legal obligation to provide vacant possession at the time they agreed pursuant to an Agreement of Purchase and Sale.
You have to deal with the issues of “closing” and “completion” under the Agreement. They are going to end up being two weeks apart. Ensure that proper insurance coverage is in place over that two week period. Seller’s insurance continues until move out time. Buyer’s insurance kicks in a little early in second position on the money transfer date etc. Instead of the being a closing which is taking place over two hours, it’s going to be a closing which takes two weeks to finish.
Brian Madigan LL.B., Broker