thestar.com
Bob Aaron

Bob Aaron bob@aaron.ca

May 9, 2009

Cottage deals need special expertise

Last month I reviewed an offer to purchase a waterfront cottage near Kirkfield, Ont. The property was listed by a real estate agent in the Kawarthas and the offer was prepared by a Toronto agent.

After I read the offer, I told the would-be purchaser that it was one of the worst cottage-area offers I'd ever read.

Here are some of the things which were wrong with the document:

The Kirkfield offer reminded me of a recent decision of the discipline committee of the Real Estate Council of Ontario (RECO), the governing body of real estate agents.

The committee report was published on the council's website, www.reco.on.ca. [ http://www.reco.on.ca/publicdocs/20081209_27516.pdf ]

Peter Mazurkiewicz is a salesperson with Homelife Response Realty Inc. As agent for the purchasers of a rural property, he prepared an offer which was conditional only on a home inspection.

The MLS listing for the property disclosed that it had a well, as well as a water supply system and a septic tank.

Mazurkiewicz did not insert conditions into the offer with respect to testing the quantity or quality of the drinking water or the condition of the septic system.

Shortly after closing, the new owners discovered that the water supply was polluted and a malfunction in the sewage disposal system posed health and environmental risks.

In fact, it may have been installed incorrectly without a building permit.

The RECO discipline committee ruled that Mazurkiewicz acted unprofessionally in failing to insert into the offer any clauses regarding a water potability test, a well certificate regarding water flow rate and a requirement for either a waste disposal certificate or an inspection of the septic system by a qualified person.

Mazurkiewicz was ordered to pay a penalty of $10,000, and Homelife Response Realty was ordered to pay a penalty of $5,000.

When I told the buyer of the Kirkfield property about the Mazurkiewicz case and the clauses that should have been in the offer, he submitted a counter-offer which was not accepted, and the deal died.

Offers to purchase city homes and country homes are totally different. If you're buying a cottage, make sure that your real estate agent and lawyer have experience in recreational real estate.


Bob Aaron is a Toronto real estate lawyer and a director of the Tarion Warranty Corporation.  He can be reached by email at bob@aaron.ca, phone 416-364-9366 or fax 416-364-3818.  Visit the column archives at http://aaron.ca/columns/toronto-star-index.htm for articles on this and other topics.

 

Bob Aaron is a Toronto real estate lawyer. He can be reached by email at bob@aaron.ca, phone 416-364-9366 or fax 416-364-3818.
Visit the Toronto Star column archives at http://www.aaron.ca/columns for articles on this and other topics or his main webpage at www.aaron.ca.