Status Certificates & Potential Impacts on Financing

If you are purchasing a condominium property and have been provided with a status certificate which discloses certain issues, including for instance, pending increases to common expenses or special assessments, be mindful of the impact that such issues may have on your financing. Even though you may be willing to accept certain issues disclosed in the status certificate, remember that your lawyer will be required to review the status certificate on behalf of your lender before closing, whether or not your Agreement of Purchase and Sale was conditional on lawyer’s review of the status certificate. Per standard mortgage instructions, the lawyer acting for the purchaser and lender as part of a joint retainer is required to review the status certificate and advise the lender if there are issues disclosed therein.

Depending on the issue, your lender may decide that they will not advance funds for this particular property. Considering that all of this happens usually closer to closing, after the deal is already firm, this could mean that the purchaser may find themselves in a difficult position. Therefore, if there are any issues in the status certificate, always confirm with your lender in writing that the issue will not impact financing BEFORE firming up your deal.

Werhun Law is a law firm located in Etobicoke serving the Greater Toronto Area. Werhun Law provides services primarily in residential and commercial real estate, mortgages, commercial leasing, and wills and estates. If you have any questions or are in need of legal services you can contact us at info@werhunlaw.com.

The information in this post is for general informational purposes only. It does not constitute legal advice and does not create a solicitor-client relationship.

Failing to deliver a deposit after an offer is accepted may result in a claim against the buyer

In the recent case of Gagliardi v. Al-Karawi, 2023 ONSC 6853, the buyer accepted the sellers’ counter-offer but backed away from the deal shortly thereafter without paying the agreed upon deposit of $40,000. The sellers subsequently sold the property to another buyer for $12,473 less than the purchase price under the original Agreement of Purchase and Sale, and brought a summary judgement against the defendant buyer seeking damages for loss and forfeiture of the deposit - even though the deposit was never actually paid. 

Ultimately, the defendant buyer was ordered to pay the $40,000 deposit plus interest and costs. 

Before submitting an offer on behalf of buyer clients, agents should always make sure that the buyers are aware of their obligations if the offer is accepted and that they may be held liable if they fail to deliver the deposit as agreed to in the accepted offer.

Read the full decision here: https://www.canlii.org/en/on/onsc/doc/2023/2023onsc6853/2023onsc6853.html

Werhun Law is a law firm located in Etobicoke serving the Greater Toronto Area. Werhun Law provides services primarily in residential and commercial real estate, mortgages, commercial leasing, and wills and estates. If you have any questions or are in need of legal services you can contact us at info@werhunlaw.com.

The information in this post is for general informational purposes only. It does not constitute legal advice and does not create a solicitor-client relationship.

What is the Estate Information Return?

If you are acting as an estate trustee (also referred to as an “estate administrator” or “estate executor”) and have been issued a Certificate of Appointment of Estate Trustee, do not forget to file the Estate Information Return (EIR) form with the Ontario Ministry of Finance.

The EIR provides information to the Ministry of Finance under the Estate Administration Tax Act, 1998, and must be filed by anyone who received a Certificate of Appointment of Estate Trustee (ie. probate), even if the value of the estate is equal to or less than $50,000 and no estate administration tax was paid. When submitting the return, the estate trustee is required to set out in detail the assets of the deceased and how the amount of the estate administration tax paid at the time that the Certificate of Appointment of Estate Trustee was applied for was calculated. 

The initial return must be received by the Ministry within 180 calendar days after the Certificate of Appointment of Estate Trustee is issued. Further, if within four years after the issuance of the Certificate of Appointment, an estate trustee becomes aware that the information submitted was incorrect or incomplete, the trustee must deliver an amended return to the Ministry of Finance within 60 calendar days of the trustee becoming aware of the inconsistency. Failure to file the form, or making false or misleading information in the form, could lead to fines or even imprisonment. 

The form is available on the Ontario Central Forms Repository website at https://forms.mgcs.gov.on.ca/en/dataset/9955, and can be submitted either online or by mail.

Werhun Law is a law firm located in Etobicoke serving the Greater Toronto Area. Werhun Law provides services primarily in residential and commercial real estate, mortgages, commercial leasing, and wills and estates. If you have any questions or are in need of legal services you can contact us at info@werhunlaw.com.

The information in this post is for general informational purposes only. It does not constitute legal advice and does not create a solicitor-client relationship.