Rachel in Legal, HomeBuying
In your agreement for purchase and sale you will very often have items, called warranties, that help define and clarify the agreement between the parties. Warranties are many and varied, but some examples include warranties that the appliances are in good working order or that the property has never been insulated with urea-formaldehyde. A purchaser will not be able to back out of a transaction due to the failure of the vendor to live up to the terms of the warranty - the only remedy is damages or financial compensation for the failure.
It will be important to talk about what is important to you with your
agent as the warranties will need to be included in your agreement of
purchase and sale. If it is not in your agreement, there is no
incentive for the vendor to agree to change the contract, particularly
if it means they will have more work or obligations.
It is also important for you to make sure that for certain warranties, your contract has language that allows the warranty to extend past the transaction closing. As an example, if you purchase a home in December that has a swimming pool, you will not likely get a chance to see if it has been winterized properly until April or May. Although you may be able to go back to the vendor at that time, it is a great deal more successful when you have a clearly drafted warranty clause in your hand.
As always, the opportunity to negotiate your clauses will depend largely on the market - when a property is highly desirable, it has been my experience that the purchaser with the fewest conditions will come out ahead. Having said that, it is important to stick to your principles. Warranties may be the first thing scratched off a contract in a multiple offer scenario and only you will be able to decide if you can live (literally) with the consequences.
Rachel Loizos is an associate lawyer at Sotos LLP in Toronto. She practices in the area of real estate law.
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