Brian Madigan LL.B., Broker

RE/MAX West Realty Inc.,
Independently owned and operated

96 Rexdale Blvd. 
Toronto, Ontario 

Phone: 416-745-2300

Cell: 647-404-8150 
Toll Free: 1-888-507-0817

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Be Careful: Don't Hand Over the Key!

August 20, 2013 - Updated: August 20, 2013


Problem Handing Over the “Key”


Many real estate agents are not particularly aware of an old common law doctrine that applies to real estate transaction.




If you take possession of the property, you accept the vendor’s title “as is”, and you waive your right to have defects removed.


As you can appreciate, this is a simple enough rule. And, it makes sense. You can’t move in and still be arguing about the conveyance.


So, this is a well-known doctrine among lawyers who practice real estate. But, the question is: do the agents know it.


The buyer has two agents in the real estate transaction:


  1. the real estate practitioner, and
  2. the lawyer.


The real estate agent negotiated the deal, and the lawyer is closing the deal. However, hopefully, they are working together.


Unfortunately, my experience is that they both work with the buyer. They do so independently of one another. Neither the agent nor the lawyer have much of an idea of what the other party is doing, or not doing, for that matter.


Let’s presume that there is a significant title problem. The lawyer requisitions a satisfactory resolution. The seller’s lawyer agrees.


In the meantime, the seller’s agent calls the buyer’s agent and says “I’ll leave the lock box in place for moving day”. The buyer’s agent obtains the key and seeing that the moving van has arrived at 11:00 am on the moving day, and that the seller moved out yesterday, gives them the key and access to the premises.


The two agents both think that they are just being good guys, and all around helpful.


However, there is a little problem. When the buyer’s movers entered the premises with the key, they took possession on behalf of the buyer in a legal sense.


So, they effectively waived the title defect. The seller is no longer responsible for the defect. Possession was essentially CLOSING.


Naturally, the buyer’s other agent (in law), the lawyer handling the conveyancing was quite upset.


Interesting! There are some easy solutions:


  • Hand over the key in escrow
  • Accept the key in escrow
  • Agree that occupancy is not possession
  • Agree that only the lawyers’ conduct will have legal results
  • Work closely, effectively with the client’s lawyer


You should worry about the KEY!


Brian Madigan LL.B., Broker

Tagged with: key common law rule doctrine possession waiver title defects ontario law
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Brian Madigan LL.B. Broker

RE/MAX West Realty Inc. Brokerage

Independently owned and operated

96 Rexdale Blvd. , Toronto Ontario,

Phone: 416-745-2300

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