Canada offers a lot of pretty wonderful benefits. We all know what they are. Some of us even salute these benefits every day of our life. There is one silent gem however that exists below our societal radar screen and this should never be taken for granted.
We honour contracts.
I've seen many hundreds of people sign contracts. Not one has ever put pen to paper lightly. It's a momentous occasion. It's a very big deal. It's as final as saying "I do". This is a very good thing and adds greatly to our quality of life.
I know from my time as a Realtor that some cultures are a bit more laissez-faire about this. But in Canada, we are accountable and the consequences of failing to meet our obligations are usually severe.
Toronto Star columnist and real estate lawyer Bob Aaron wrote about a small claims case recently. Simply put, buyer and seller had a binding contract on a house. Before closing, the buyer learns the taxes on the property were almost double the amount published on the listing. An addition to the property triggered a reassessment, hence the increased taxes.
Two days before the agreed closing date, the buyer tries to squeeze the seller by refusing to close unless the agreed price is reduced by $10,000.00. Seller says "no" and the deal does not close. Sadly, the parties were not able to work out a reasonable solution and this dispute went to court.
Bob quoted the judge's ruling. "The vendors knew or ought to have known that they were obliged to compensate the purchasers for the misrepresentation on the taxes if the purchasers were forced to close. (The $10,000 reduction offer) certainly appears to be a reasonable attempt to estimate (the purchasers) potential loss. (The sellers were) negligent in absolutely refusing the $10,000 abatement".
This highlights an important part of any negotiation. As a Realtor, one of my job responsibilities is to qualify the parties signing the contract. The integrity of a deal is valued in direct proportion to the desires of both parties to enter into said contract. If a buyer is offering on a property, the more he/she wants it, the more likely it will close successfully without problems. Ditto for the sellers. Cold feet can trigger problems with closing. When this happens, no one wins (except the lawyers perhaps).
