We represent defaulting and non-defaulting sellers and buyers in breach of contract claims relating to real estate agreements of purchase and sale. We have found that a number of sellers will sign an Agreement of Purchase and Sale, and later decide to change their mind and not sell. If the prospective purchaser does not agree to sign a Mutual Release, which releases all parties from future claims and actions against one another, the seller could be exposed to a claim for breach of contract.
Sellers may wish to terminate an Agreement of Purchase and Sale if they have entered into the agreement prior to a general price increase in the market. In such a scenario, the sale price of the property may be below the current market value of the home. As such, the seller will not wish to sell their property at a price lower than the market. Accordingly, the seller will attempt to default on their agreement, hoping that the buyer does not seek recourse. Buyers of these properties, intending to close the transaction and experience an immediate capital appreciation, will pursue sellers for all losses that are a reasonable and natural consequence flowing from the breach of contract.
With a recent downturn in the Toronto residential housing market, buyers are now walking away from their deposits after they have entered into Agreements of Purchase and Sale, and they may be unable to recoup the same unless through a Mutual Release, Court Order, or the closing of the home. When you are embroiled in a real estate dispute, it is advisable to call a lawyer that understands the standard form documentation that governs real estate transactions in Ontario, and how to protect your rights.