Writing Clauses for Real Estate Offers (4)
On the Clause Writing Course, here are the next five (21 to 25) questions:
Acquisition of Second Property
Randy Rupert is your client, the Buyer. There is a waterfront property which he is about to purchase. There is a driveway which runs across another property owned by the same Owner. The waterfront property is worth about $600,000.00. The other property with highway frontage is a rental and it would be worth about $200,000.00; only problem is that it is not listed for sale.
Randy wants them both. How would you structure the deal? How would you protect Randy? Are there any clauses you might consider? If so, what are they?
Capricious Walk Away
Ryan O’Toole is your client. He travelled out of Toronto on business and ran across a perfect property on Lake Muskoka which he believes that his wife Jaine would love. However, Jaine is very, very choosy, and she might not like this house or the property or the location.
Ryan wants to put in an Offer to tie this property up for a few days so that he can bring his wife up to have a look. If for whatever reason, she doesn’t like it, he wants to be able to walk away. Ryan is a lawyer and is familiar with Bhasin v. Hrynew, so he wants his rather hefty deposit back, if Jaine says “no”.
Are you able to draft something which will get around this case? How would you approach the situation? What clause or clauses would you propose to protect Ryan and ensure the return of his $50,000.00 deposit should Jaine not be enamoured with this place?
Vacant Lot Risk
Gordon Sumner is your client and owns a remote, rural property. Over the last two decades he has only been there on three occasions. It’s about 100 acres, partially wooden with a stream running through it and quite rocky. There’s also lots of wildlife. The property is located north of Algonquin Park.
He would want to make sure that there is no personal liability upon him, if anyone were to look at the property. There’s no insurance in place.
What, if anything, would you put in the Listing Agreement, and/or the MLS in order to protect Gordon?
Boathouse, Dock, and Deck Location
Reginald Dwight is a Buyer client of yours. You appear to have found the ideal property on Lake Rosseau. The Boathouse itself is several thousand square feet and there is a three bedroom apartment above it. The dock is expansive and there is a rather huge deck adjoining the Boathouse to a wooden staircase with access to the main house.
Are there any particular issues here? How will you be protecting Reginald? Is there a clause or clauses that would help? If so, please draft them.
- Seasonal Flooding
Elmer Phan is interested in purchasing a cottage property in the Kawarthas. There has been rather substantial Spring flooding for three years in a row. This year the water level reached the cottage itself and ran up the side by about three feet. Fortunately, there is no basement in the cottage. Elmer wants waterfront, but naturally he doesn’t want to be under water.
Do you have any clauses which would afford him some protection in an Offer? If so, please draft them.
Let me know if you have any suggestions for other types of issues which may arise in a real estate transaction?
Brian Madigan LL.B., Broker