My Closing Newsletter – March 2020
Your Real Estate Transaction and the COVID-19 Pandemic
MyClosing (powered by Anderson Sinclair PC) recognizes the many challenges realtors are facing during this unprecedented time with COVID-19. In response, MyClosing is providing realtors with our news bulletin to help you navigate your real estate transactions in the current market.
Should Realtors Accept New Listings?
- Real estate services are considered essential workplaces and will remain open. The Land Registry System remains operational. Transactions are closing and will continue to close.
- Realtors can accept new listings; make sure your clients understand how your services will be affected.
- Many buyers and sellers may be hesitant but there are still clients who need to buy and sell right now; service these clients.
- Realtors should become familiar with technologies that will facilitate their ability to service clients remotely during this time of social distancing. Consider virtual, digital and paperless solutions.
New Construction Build Transactions
It can be expected that the pandemic will cause delays in the delivery of new construction homes.
▪ Tarion New Home Warranty will not provide Delayed Closing Compensation to purchasers for delays due to COVID-19.
▪ Tarion has suspended warranty deadlines and will be giving homeowners an extension to submit any warranty claims
▪ If you have clients expecting to close a new construction home in the near future, you should contact them now to discuss alternate housing arrangements
▪ Consider adding a clause to the APS for your seller clients who have purchased new construction properties.
COVID-19 Agreement of Purchase and Sale (“APS”) Clauses
Realtors should consider inserting these clauses, where applicable, to any existing and future agreements. The following clauses will help protect your clients on the day of closing. COVID-19 Delays Clause
Buyer and Seller acknowledge that due to measures taken by the Provincial Government in response to the current COVID-19 pandemic, there could possibly be a delay at land registration that would affect the actual registration date from the date herein contemplated. In such event, the Buyer and Seller hereby agree to extend the completion date of this transaction until the next possible date following the scheduled date of completion that registration could actually be effected with no additional charges being made to the Buyer.
COVID-19 New Construction Delay Clause
The Buyer hereby acknowledges that the Seller has purchased a new construction home and delivery of the Seller’s new construction home may be delayed due to builder delays arising from COVID-19. The Buyer hereby agrees to allow the Seller one opportunity to amend the closing date to a date no later than sixty (60) days past the originally scheduled closing date, to accommodate any builder delays faced by the Seller.
*Waiver of Liability Clause*
Many requests have come to our legal team requesting a waiver of liability clause to protect agents and brokerages if a deal falls apart due to COVID- 19. This type of clause on its own will likely be ineffective and unenforceable by the courts. Importantly, such a clause may not send the right message to the client.
It is important to remember there is no all-purpose clause to address your specific transaction. Realtors should contact our legal team at 1-800-308- 5668 ext. 3265 for any legal advice relating to COVID-19 clauses.
Things to Remember When Advising Your Clients
Parties are expected to be ready and willing to close on the scheduled closing date. The pandemic (on its own) is insufficient justification to cancel a deal.
▪ Realtors should encourage clients not to close sale and purchase transactions on the same day. Delays in banking can and will pose challenges
▪ Where possible, encourage clients to obtain bridge financing.
▪ This is a challenging time for everyone. Advise your buyer/seller clients to act with fairness and reasonableness to the other party throughout the transaction.
▪ Duty to mitigate – regardless of the pandemic, parties must take all reasonable steps to recover any losses or prevent additional losses if a transaction does not go through.
▪ Consider increased deposits and increased extension costs to protect your seller clients.
Anderson Sinclair is here to help you and your clients navigate their real estate transaction. Please feel free to contact one of our lawyers at 1-800-308-5668 ext. 3265.
About MyClosing powered by Anderson Sinclair LLP
MyClosing powered by Anderson Sinclair is a leading edge, digitally enabled real estate closing services company that provides Canadians with a transformative way to close their purchase, sale and refinance transactions. Powered by Anderson Sinclair PC and with over 125 years of legal experience across Canada, MyClosing is the preferred supplier to many real estate, mortgage and lending companies across the nation.
MyClosing / Anderson Sinclair is pleased to announce we are offering remote signing using a Video Signing Room (VSR) and e-signature technology on all our real estate transactions. Please contact us to help make your client’s transaction convenient, seamless and safe during the pandemic.