Canada's Condominium Magazine
Reader: “If I’m unable to pay the second deposit on my pre-construction condo, what happens other than me losing the first 5% that I have already paid?”
Richard Hoffman answers: “If a purchaser fails to pay the second deposit they will be in breach of their agreement of purchase and sale and all deposit monies paid will be forfeited. In addition, the vendor will also be entitled to seek recovery of any damages it suffers as a result of the purchaser’s breach.
For instance, if the vendor is only able to sell the unit for less money than what this purchaser agreed to pay, the vendor can seek recovery of the difference in price. If they do seek this amount, the forfeited deposit monies will be credited against that amount. In addition the vendor can seek recovery of any additional costs it incurs as a result of the purchaser’s breach, such as additional carrying costs for the unit and/or additional real estate commissions paid on account of the vendor having to re-list and sell the unit.”
RICHARD P. HOFFMAN
Richard Hoffman has been a member of DelZotto, Zorzi LLP since 1992, practicing in the area of condominium law. He has represented condominium corporations and unit owners through all stages of the litigation process and at all levels of Ontario Courts (Superior Court of Justice, Divisional Court and Court of Appeal). He is well experienced in handling all types of condominium litigation, from applications to enforcing compliance with declarations, by-laws or rules, to handling multi-million dollar claims for budget misrepresentation. He has also advised condominium corporations of various sizes on all facets of condominium law.
Richard is presently a member of the Canadian Condominium Institute and regularly lectures on contract and agency law in the condominium context at Humber College, as well, he is a regular contributor to various condominium magazines and has contributed to the condominium section of the Toronto Star.