The Completion Date Consequences
It is vital that the completion date on the Contract of Purchase and Sale is adhered to, at all costs by the Buyer. Should the Buyer be at fault and the transaction does not complete as scheduled, the Seller has the option of voiding the contract. In addition, the Seller is legally allowed to keep the full amount of the deposit. There have been several attempts to have the Buyer’s deposit returned to the Buyer. Read the Deposits are Serious blog post for a full understanding.
Completion or Closing Date
The term “Completion” is noted in the Contract of Purchase and Sale under item 4. The completion date can also be termed the closing date. However, nowhere in the Contract of Purchase and Sale is the term, “closing” date used.
Completion Date Extension
Should the completion date be in jeopardy and the Buyer is delayed by a day (usually the funds have not been in Canada long enough to be released) the Seller may agree to an extension. This extension signed by the Buyer and the Seller allows for a change of the date of Completion. However, count on the Seller charging you a hefty financial penalty for this extension.
The Seller can require you to pay thousands of dollars for an extension. Some Sellers have also been known to void the sale, keep your deposit and then pursue legal action for breach of contract.
Market Drop Affecting the Sale Price
Another factor to consider is if the Buyer does not close and the market drops in value delaying more offers at the same price or more. For example, 3 months later, the next offer comes in at $200,000 less than the collapsed sale price. The Seller might be willing to take the Buyer to court to sue for damages. In addition, what if the Seller had an offer in play to buy another property, and the sale not completing meant that the Seller had lost his deposit and was not paying a hefty extension fee, or was getting sued for Breach of Contract? This can be an ugly situation, and there are lots of court cases for the lawyers to use as precedent…the scenario is not that far-fetched.
The main advice with all of this is to ensure that you treat every aspect of the Contract of Purchase and Sale with the seriousness it demands. Taking a lackadaisical approach will be costly and may take years to resolve. There is a reason you need to work with an experienced Whistler realtor who can guide you along every step of the way.
If you think I would be a good fit to work with you and your family, and you are not working with a Whistler realtor, please contact me. I look forward to hearing from you.
It’s a Good Life in Whistler!
Marion Anderson Personal Real Estate Corporation
marion@WhistlerSkiinSkiout.com (604) 938-3885