1 Washing Machine, $20,000, and the Realtor Who Was Almost Sued.

Story time...

In 2020, the seller, Sally, purchased a Vancouver apartment that featured in-suite laundry. She lived there for several years before deciding to sell, listing the property with the same realtor who had originally represented her on the purchase. The MLS listing, consistent with the original sale, advertised the unit as having in-suite laundry.

Listing, showings, offer, and subject removal proceeded as normal, everything seemed fine until about 2 weeks before closing when I get a WhatsApp message (yes, realtors, if we're closing a deal together you can WhatsApp me to solve problems) from the listing agent, on behalf of my client, the seller, saying the strata board has a problem with her in-suite laundry.

Despite the 2020 MLS listing showing in-suite laundry, they had now taken issue with it, and by closing day had issued a formal demand to have the washing machine either removed, or approved through an onerous and complex process involving an engineer’s report and strata approval. I had sympathy for the buyers who were about to take possession then immediately go to war with their strata.

While we're trying to sort the situation out, the buyer's agent does something which has a technical legal term - it’s called "incredibly stupid." He texts the listing agent saying "if the washing machine has to be removed, the buyers are prepared to withdraw the offer."

Realtors, if you learn one thing from this newsletter, it's to run this kind of text by a lawyer before you send it. Or better yet, don't even think about sending a text like this.

After subjects removal, a contract of purchase and sale is legally binding and cannot be “withdrawn.” Realtors, and all parties to real estate contracts of purchase and sale should be aware that:

1. A subject-free offer cannot be withdrawn. If a party fails to complete, it constitutes a breach of contract, and legal remedies such as forfeiture of the deposit or a claim for damages may follow.

2. The doctrine of “anticipatory breach”: A legal doctrine where, in the event one party to a real estate contract gives a clear intention they do not intend to be bound to the terms of the contract, the innocent party, in anticipation of the breach, can elect to treat the contract as at an end and pursue damages.

Legal correspondence often emphasizes that a party is “ready, willing, and able to complete” to preclude allegations of anticipatory breach.

The Outcome

The seller could have claimed the deposit, relisted the property, potentially pursuing the buyers for damages if the resale price was lower than the original offer. The buyer’s agent’s message created unnecessary risk, not only for the buyers but also for themselves.

Fortunately, the deal still closed. After intense negotiation with litigator Robert Peake, the buyer agreed to a $20,000 price adjustment, and closed. Our client preferred closing for 98% of the contract price rather than risking a lawsuit with the buyer in breach, a battle with the strata, and having to find a new buyer. In that event, the buyer's agent would almost certainly be sued.

Remember:

• Arora Zbar LLP handled this in house. Our firm has real estate litigators, and transaction lawyers, under one roof - every notary, and many real estate law firms, do not.

• Communicate Carefully: Never make statements that could be construed as an intention to breach the contract.

• Understand Contract Law: Between subject removal and closing, parties are bound by the terms of the agreement. Be like the seller’s realtor, manage issues in consultation with a lawyer.

🤔 Did You Know?

I offer real estate agents and mortgage brokers complimentary short phone consultations. Message me on WhatsApp, or book a call.

A reminder that Arora Zbar LLP has 4 lawyers offering services in real estate transactions, construction disputes, corporate law, commercial litigation, tenancy/strata disputes, and estate planning.

We offer services in English, Punjabi, and Farsi. We are also super transparent about pricing, check out our app at www.pricemyconveyance.com - it calculates property transfer tax, too!

Contrary to what people think, a lawyer is not more expensive than a notary. Remember that all lawyers are notaries, but notaries are not lawyers. In my experience, most notaries refer clients to a lawyer as soon as there’s a problem with a deal. Why not start with a lawyer?

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