Buying a home is an exciting yet overwhelming endeavor. Like most homebuyers, you are probably focused on the big picture and the essential tasks you must take on. Don’t be so quick to overlook the minor details, or it could come back to haunt you. One homebuyer in Richmond Hill learned this lesson the hard way in the fall of 2016.
Edward Yip signed a contract to purchase a home for $2.175M. The purchase included some of the appliances. The contract did not include any fixtures. Yip’s lawyer performed a title search after the contract was signed only to discover that the sellers of his new home did not own their HVAC equipment.
According to the warranty clause in the purchase agreement, any contractual rights survived the closing of the home and were binding on all parties. The sale contract lacked an amendment explaining that the HVAC system had a registered lien with Enercare, the owner of the system.
When they closed on the home, Yip was delivered a standard bill of sale which transferred ownership of the appliances and the fixtures. However, handwritten on that bill of sale were the words “except HVAC.” The terms of the purchase agreement were not reflected by the bill of sale.
Upon learning this, Yip told the sellers he would only close “under protest.” As such, the sellers said they would not close unless he withdrew his notification, which he did reluctantly.
When the closing was complete, Yip filed a lawsuit against the sellers of the home for the expense of buying the HVAC rental from Enercare. Newmarket Small Claims court heard the case in December 2018.
The judge ruled in favour of the buyer, explaining that the sellers knew that the HVAC system was still encumbered by the rental agreement. Yip was awarded $17,488.27 in damages for the buyout of the HVAC system and five chandeliers that the sellers had removed. The chandeliers were not in the terms of the agreement.
The homeowners appealed to the Ontario Superior Court, but their appeal was dismissed in February of 2020. In addition, Yip was awarded costs of $3,500.
This case highlights some vital lessons to both homebuyers and home sellers:
- Sellers should be very clear about what appliances and fixtures are included and which ones are rentals in their seller agreements.
- Disclose whether the hot water tank and HVAC systems are rentals or included in the property’s purchase price.
- Buyers in similar circumstances as Yip are not allowed to refuse to close, but they can file a lawsuit against the seller afterward for their damages.
Do You Need a Mortgage Lawyer?
If you have questions about buying or selling a home and its appliances or fixtures, seek legal advice as soon as possible. Speak with a mortgage lawyer at Nanda & Associate Lawyers by calling (905)-405-0199 or use or contact us online. We assist clients of all nationalities and backgrounds and provide legal services in 19 different languages, including English, French, Chinese, Italian, Hindi, Punjabi, Gujarati, Bangla, Tamil, and Telugu.