Home sales, purchases go ahead with unprecedented virtual tools during the pandemic


thestar.com
Bob Aaron
Bob Aaron bob@aaron.ca

Posted On: Saturday, April 11, 2020
There is good news and bad news for those of us in the real estate field during the COVID-19 pandemic.

Some good news came from Jeffrey Lem, Ontario’s director of titles, in a Law Society webinar late in March. Speaking electronically to several thousand Ontario real estate lawyers, Lem said there was absolutely “zero chance” that the Teraview electronic land registration system would close down during the pandemic.

That was good news to most clients, real estate agents and lawyers who had signed deals before the virus hit, and were planning to close home sales and purchases.

The same message was bad news for others including purchasers who could not sell their existing homes, those who could not close or did not want to close, and those whose stock portfolios had taken a huge hit and could not liquidate enough funds for closing.

Lawyers have been declared an essential service and some real estate lawyers have kept their offices open — either because of the difficulty of moving to remote operations, or to meet clients for signing appointments across a six-foot separation. Many of us have adopted various video technologies to have virtual meetings to explain and witness document signings.

One of the problems has been having transactional affidavits or declarations sworn “in the presence of” a lawyer, as required by provincial legislation. This prompted the Law Society, for the first time ever, to re-interpret the legislation permitting lawyers to swear affidavits by video conferencing.

In the new construction area, the Ontario government, to its credit, has passed an emergency order suspending limitation periods for all Tarion warranty claims, delayed closings, conciliations, inspections and financial loss claims for the duration of the pandemic, retroactive to March 16, 2020.

Pre-closing inspections are another matter. Some Ontario builders have not been sensitive to consumer difficulties caused by the pandemic. Burlington lawyer Gord Mohan told me last week that he had two closings involving clients who had just returned from abroad. They were in compulsory self-isolation and could not complete the pre-delivery inspection or leave home to do the banking necessary to close the transactions.

One builder allowed a five-day extension. Another law firm, or its builder client, refused to budge and insisted on closing as scheduled. Sadly, this type of response to the COVID-19 crisis reflects poorly on the entire builder community.

Another problem that has surfaced is a set of COVID-19 clauses being promoted by one GTA law firm, and at least one large real estate brokerage, for standard real estate agreements. These clauses indefinitely postpone closings, interfering with the contractual terms.

But the clauses have not been approved by the Ontario Real Estate Association or real estate lawyers. In my view the use of these clauses is extremely dangerous and could well cause extensive and expensive litigation against the parties to the agreement, and the agents who use them.

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Bob Aaron is a Toronto real estate lawyer and frequent speaker to groups of home buyers and real estate agents.
He can be reached by email at bob@aaron.ca, phone 416-364-9366 or fax 416-364-3818.

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