Common Home Buyer Questions

1. Will this contract force me to buy this home?
A contract is a legally enforceable promise. Therefore, you are obliged to carry out its terms if the contract is firm and binding. However, a contract can be “subject to” the performance of other terms (for example, obtaining a mortgage). Most Realtors draft “subject to” conditions to allow Buyers time to find out more about the home they are buying and to ensure they are able to obtain financing to purchase it.

2. What happens if I can’t get financing or I am not happy with my home inspection?Usually a Realtor has written in these items as “subject conditions”, if so, you will instruct your Realtor that you are “unable to waive or fulfill” you contract. If you are unable to waive or fulfill a subject condition, your obligation to purchase the home will cease.

3. Why do I have to give a deposit to the Realtor? Will I get it back if I back out of the deal?
A deposit is “earnest money” meaning that it signifies to the Seller how serious you are to proceed with the transaction. Your Deposit is not a “down payment”, as your cash in the deal (in addition to your mortgage) will be paid on the Closing Date. Whether a Deposit is returned depends on the factual situation which caused a deal to collapse (see below), however your Realtor cannot simply return your deposit without first complying with the provisions of the Real Estate Act.

4. If I can’t complete on the Completion Date will that be a problem?The contract provides that “time is of the essence” this means that the strict timelines in the contract are enforceable by the Court. In the event that you fail to complete “on time” you may be liable for damages (money damages) or specific performance (where the court orders you the complete the deal). If you find out that the original dates will simply not work for you, please let your Realtor and Lawyer know so that they can attempt to obtain an extension for you.

5. If I back out of the deal after removing my subject conditions, will I just lose my deposit?
Assuming that the Seller has not misrepresented and is able to complete, generally a Buyer cannot simply “walk away” from their deposit. Should a Buyer fail to complete a firm and binding contract, the Buyer may be liable to the Seller for all of the Seller’s damages including: a) loss of profit, b) interest costs, c) marketing costs, and d) legal fees. In many cases, the amount of the Seller’s damages may exceed the deposit. If you are considering this, please call your lawyer immediately.

6. I really like the bedroom light, how do I know this is included with the house?
Generally, all fixtures are included with the sale of the house. Fixtures are those items that are affixed (ie. attached to) the structure and foundation (eg. chandeliers). Sometime, exactly what “is” and “is not” a fixture has to do with the “degree of attachment” and this can be confusing for both buyers and sellers. Given this confusion, sometimes Sellers remove items (ie. wall shelving) when they move out, so if there is something of importance which you want included with the purchase of you home please let your Realtor know.

7. The property has an “in-law suite”, can I rent it out to other people?
A secondary suite can only be rented in the City of Kelowna or the District of West Kelowna where the property has been zoned “S”. If you require that the suite to be rented to afford to live in the property, we strongly recommend that you inquire with the applicable municipality.

8. If I own the property can I do whatever I want with it?Although an owner can do many things with a property that a tenant cannot do, your ownership may be subject to restrictions that are found in local statutory building schemes, homeowner’s associations, strata councils, and municipal bylaws. If your purchase of the property is dependant on a change in structure (ie. major renovation) or use (ie. home based business) please discuss this with your Realtor.

9. If my spouse goes on title alone and we separate, will I have no claim to my house?
The Family Relations Act creates an interest in land upon the breakup of a marriage, even if there is no interest noted on the land title (subject to a prenuptial agreement or the Act). The Act allows for filing of an interest in land, upon marriage breakup, in the land title office.

10. A clause on my contract (i.e.; title search or tax advice) is “subject to review by the Buyer’s lawyer [or accountant]” what should I do?
Prior to subject removal, you should take the contract to your lawyer or accountant and discuss your proposed purchase with them. Your Realtor has placed this clause into your contract to ensure that you obtain personalized professional advice in a specialized area (such as tax or a title search).

11. What are my closing costs?
Closing cost vary with each transaction. These include Property Transfer Tax, Municipal Property Tax, Strata Documentation and Adjustment Fees (if applicable), Land Title Office Filing Fees, and Legal Fees. We provide all clients with a quote on Legal Fees and an estimate of the other costs you can expect after we receive your contract, to ensure there are no surprises on closing.

About the author:

The grandson of a local orchardist, Peter Borszcz was born and raised in Kelowna, B.C. Peter is a solicitor whose practice focuses on Real Estate Law, Business Law, Commercial Transactions, and Business Succession Planning. Peter obtained his Bachelor of Laws from the University of Alberta, where was awarded both Dean’s List standing and the Louise McKinney scholarship for placement in the top 2% of his law school class. After law school, Peter performed his articles with Borden Ladner Gervais LLP and immediately thereafter joined the firm as an associate in their commercial real estate group.

Peter returned to Kelowna in 2006, and joined Pihl Law Corporation as a Corporate Shareholder in 2009 where he manages the Business, Corporate and Real Estate law departments of the firm.