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Compensating the seller
- A firm purchase agreement is a binding contract, and if the buyer fails to close, they are responsible for compensating the seller. The seller is entitled to be reimbursed for the price difference if the home is eventually sold for a lower amount or for the market value if the home is not sold.
www.deeded.ca/blog/buyer-wont-close
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Oct 3, 2023 · Once the purchaser fails to close on the closing date. Meaning not providing the funds and executing the closing documents, the seller should tender the closing documents and must maintain they are ready, willing and able to close.
Where a buyer fails to close, in most circumstances the deposit will be forfeited. In Azzarello v. Shawqi, 2019 ONCA 820 (CanLII) Justice Feldman clearly outlines the law in Ontario in relation to deposits where a buyer fails to close the transaction at paragraph 45 as follows:
When a buyer fails to close, they are then responsible for making the seller “whole”. The buyer, in many cases, will also be required to forfeit their deposit, regardless of whether the vendor has suffered any damages.
Apr 16, 2024 · The forfeiture of the deposit is the most immediate and palpable consequence of failing to close a real estate transaction. In Ontario, the law is clear: if a buyer cannot complete the purchase as agreed, the deposit is forfeited to the seller.
Aug 30, 2022 · Signing a purchase agreement and then failing to close can have serious financial consequences—and courts don’t take it lightly. When it comes to backing out of a real estate deal, the law ...
In general, we would recommend that it be made clear that the buyer will be held responsible for all damages if the buyer does not close. If, after that, the buyer cannot or will not close the seller may wish to consider whether it may be worthwhile to reduce the price and close rather than re-list and have to proceed with legal action.
