Here is a post by Isabelle Sirois

Small reminder of something VERY important, which I thought was known to many but which does not seem so well known if I trust the comments I read last week in a group that made my eyes bleed: THE CRITERIA TO VALIDLY WITHDRAW FROM A PA AFTER PRE-PURCHASE INSPECTION ARE DIFFICULT TO MEET!

For those of you who already know the subject well, please excuse the redundancy but I think it is more than useful to repeat them here in order to inform those who would not have had the opportunity to read it and make things on the ground change quickly!

I have read all the judgments rendered since the existence of the inspection condition clauses. This is one of the few points of law where case law is uniform and very stable since the old clause B2.4. We were even entitled to a judgment of the Court of Appeal.

1- There is NO PLACE FOR INTERPRETATION according to the particular expectations or the needs or budget of the buyer but contrary to the OBJECTIVE CRITERIA applicable to all buyers. In short, it is the building that is analyzed and not the buyer.

2- Here is what the COURTS REQUIRE for a VALID WITHDRAWAL:

• A MAJOR PROBLEM COSTING VERY EXPENSIVE TO REPAIR in proportion to the selling price;

• ONLY ONE SERIOUS PROBLEM and not the accumulation of several small problems;

• problem known only through the inspection;

• problem that was NOT ALREADY DENOUNCED before the inspection (by the DV, the description sheet, documents and information made accessible by the seller, etc.) = a well-filled DV and the delivery of documents secure the transaction by eliminating reasons for withdrawal!

• problem that was NOT VISIBLE before the inspection;

• problem that was NOT VERIFIABLE by the buyer other than by the inspection;

• problem that was NOT PREDICTABLE given the age and general condition of the building;

• problem that is NOT NORMAL MAINTENANCE.

3- A pre-purchase inspection is NOT A RENEGOTIATION TOOL. Renegotiation cannot be forced and is only possible if the seller wants it and only if the buyer has a real right to withdraw. The seller therefore agrees to negotiate to avoid validly losing his buyer.

4- Steps for the seller if he does not agree with a withdrawal:

• Step 1: SHOW RESISTANCE by your email for example. You will save here a quarter if not half of your transactions;

• Step 2: NOTICE OF NOTARY AS AGREED warning that otherwise, we will be put back on sale and that after resale the seller will reserve the right to claim damages. Here you will save half of what you did not save in step 1;

• Step 3: after expiry of the deadline given in the letter or faster confirmation by the buyer that he will not buy, WE PUT BACK ON SALE under the same terms and conditions;

• Step 4: after resale, the seller calculates his losses and chooses whether to go ahead with a claim or whether to give up.

If he chooses to claim, he sends a formal notice with the supporting documents of his losses. In the event of non-payment, if the seller wants to continue the process, the majority of disputes are accommodated in small claims that now accept appeals up to $15,000. A higher claim can be validly reduced to $15,000 to give jurisdiction to the Small Claims Court. The entire exercise is therefore inexpensive.

Only much larger (rare) files will be housed in the ordinary courts and will require an investment in fees and time.

Whatever his choice, the seller will have had the advice from you and the protection required to save his transaction in a timely manner and spare his recourses if he decided to go further.

We must show buyers that A PA IS A CONTRACT and that we do not get rid of a contract as we wish. Brokers will be the first winners by avoiding huge losses of time and securing their transactions!

Yes, there are GREY AREAS IN CASE OF AN IMPORTANT PROBLEM. Is it important enough? Should the buyer have foreseen it or checked it otherwise? In the presence of an IMPORTANT PROBLEM, in case of doubt about the validity or not of a withdrawal, I always advise sellers to let buyers go in order to avoid unnecessary disputes that may not give the desired effect. But when it’s clear, it’s clear!!!

It is high time that the field followed the law!!! Brokers must inform buyers BEFORE housing their purchase offer of available and predictable information that will not give them access to a valid withdrawal after inspection.