One of the biggest questions purchasers have for their lawyers is whether they will have their deposit returned if the deal goes south for any reason. The answer depends entirely on the reason the deal does not close. Below we have listed some of the most common reasons that purchases have not gone through and whether the purchaser should be entitled to the return of their deposit.
The APS includes a condition for the purchaser to obtain satisfactory financing (usually a 3-5 day window), and the purchaser could not obtain sufficient mortgage funds to close within the financing window.
The APS includes a condition for a home inspection and the inspection turns up defects which the purchaser is not prepared to accept.
The APS includes a condition for the purchaser’s lawyer to approve a Condominium Status Certificate, and the lawyer is not satisfied with the Status Certificate after such review.
The purchaser’s lawyer discovers “title defects” on the property that vendor will not or cannot remedy including:
i. Vendor’s outstanding mortgage still on property
ii. Unpaid construction liens and other executions against Vendors
iii. Ownership disputes (most often where vendor is a spouse in separation or divorce proceedings)
iv. Municipal work orders registered against the property
The Vendor refuses or is unable to close on time
The purchaser becomes aware, prior to closing, that the vendor misled them, intentionally or negligently, about an important aspect of the house or neighborhood.
The purchaser cannot obtain sufficient financing after waiving a condition for financing, or where no condition for financing was included in the APS.
The purchaser becomes aware of defects in the house which would have been visible on a home inspection, but did not include a condition for home inspection, or waived this condition without having a home inspection completed.
The purchaser becomes aware that there are major increases in common expense payments for their condominium, or that there is a large upcoming special assessment, but waived their condition for inspecting the Status Certificate, or did not include such a term in their APS.
The buyer gets “cold feet”.