Corporate Commercial Archives -

By Slonee Malhotra 2015/12/11

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Your home is likely your biggest investment and it is important to protect it. Real estate lawyers often recommend that their clients purchase title insurance. Title insurance covers unknown risks or problems such as title fraud, damage to structures caused by by-law infractions, outstanding liens and title defects relating to the property. Such policies are designed to compensate for actual loss arising from defects in existence as at the date of the policy.

In a recent case before the Court of Appeal for Ontario, MacDonald v. Chicago Title Insurance Company of Canada [2015 ONCA 842], the MacDonalds purchased a home in Toronto in 2006 and at the same time, through their lawyer, they also purchased a title insurance policy with Chicago Title Insurance Company of Canada. In 2013, the MacDonalds discovered that the second floor of their home was falling apart. A load-bearing wall had been removed during renovations seven years ago and as a result, the second floor was unsafe to use. At this point, the City of Toronto got involved and issued a remediation order. It turned out that the previous owners of the property had conducted unapproved renovations and had removed the load bearing wall without obtaining the necessary building permits through the City.

The MacDonalds turned to their title insurer and made a claim for the cost of installing the temporary support for the second floor and the subsequent permanent repairs. Chicago Title denied coverage on the basis that the defect did not affect “ownership of the land” and therefore did not affect “title”. The MacDonalds then took their claim to the Ontario Superior Court of Justice and argued that the policy provided coverage under the clause:

“your title is unmarketable, which allows another person to refuse to perform a
contract to purchase, to lease, or to make a mortgage loan”.

At the trial level, the Judge found that title remained marketable, even though it was marketable for an amount that was less than what the MacDonalds had paid when they purchased the property. The MacDonalds appealed this decision.

The Court of Appeal was quick to point out that the fact that someone might be willing to purchase a dangerously defective building does not mean that it is “marketable” under the title insurance policy. The proper approach is to ask:

  1. Can a potential purchaser refuse to close an Agreement of Purchase and Sale on learning of the defect? and;
  2. Is coverage excluded under the exclusions or limitations of liability provisions of the title policy?

The Court of Appeal also confirmed several important principles applicable to the interpretation of title insurance policies:

  1. Coverage provisions are to be construed broadly and exclusion clauses are to be construed narrowly;
  2. The contract of insurance should be interpreted to promote a reasonable commercial result; and
  3. Ambiguities will be construed against the insurer, having regard to the reasonable expectations of the parties.

The MacDonalds were awarded $32,800.00 for their damages which also included a portion of their legal fees.

Not all title insurance policies are the same. When you are purchasing a home, it is important to review the wording of the title insurance policy and choose an insurer wisely. Our real estate lawyers will be able to assist you in determining which provider will best represent your needs. Contact SorbaraLaw for a consultation today.

Slonee Malhotra is a lawyer in the Real Estate and Corporate Commercial groups at Sorbara, Schumacher, and McCann LLP, one of the largest and most respected regional firms in Ontario.

* * This article is intended only to inform and educate. It is not legal advice.  Be sure to contact a lawyer to obtain legal advice on any specific matter.

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By Cameron Mitchell and Nigel Smith, Law Student 2014/11/28

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The Supreme Court of Canada released a decision last week that could result in significant changes regarding the way that contractual relationships and business disputes are dealt with by the courts.

You may know that, while commercial parties are free to act in their own best interest, there was a general common-law principle that parties to a contract must act in good faith and carry out their contractual obligations reasonably and according to the contract’s intent or purpose.

In Bhasin v. Hrynew (“Bhasin”), our Supreme Court acknowledged the general ‘organizing principle’ or requirement of good faith in performing contractual obligations and recognized a new duty in addition to the principle of good faith: honesty.  To most businesspeople, it likely seems self-evident that parties to a contract should act honestly when carrying out their respective duties.  So what led the Supreme Court to enshrine this new, higher standard?

Summary of Bhasin

In the Bhasin case, Harish Bhasin (“B”), a retailer of financial savings plans, had been doing business with a wholesaler of savings plans since 1998. At one point, the wholesaler began doing business with another retailer (“C”). At one point, the wholesaler altered the wording of its standard contract, and B executed the new contract. A new renewal clause stated that either party could trigger non-renewal of the contract by giving notice before the expiry of a term. When the wholesaler asked that C audit B’s business, B refused to give C access to his confidential information. C was a competitor and was interested in merging with B’s business. The wholesaler ultimately gave notice to B that it would not be renewing B’s contract. B sued the wholesaler and C claiming that they had conspired against him and that the wholesaler had failed to act in good faith when terminating the standard contract; all of which diminished the value of B’s company.  Although an appeal court ruled that there was no implied duty of good faith in a contract (the standard contract did not contain a ‘good faith’ clause), B was ultimately successful at the Supreme Court.

The key part of the Supreme Court’s ruling is as follows:

“It is appropriate to recognize a new common law duty that applies to all contracts as a manifestation of the general organizing             principle of good faith: a duty of honest performance, which requires the parties to be honest with each other in relation to the           performance of their contractual obligations.

Under this new general duty of honesty in contractual performance, parties must not lie or otherwise knowingly mislead each other about matters directly linked to the performance of the contract.  This does not impose a duty of loyalty or of disclosure or require a party to forego advantages flowing from the contract; it is a simple requirement not to lie or mislead the other party about one’s contractual performance.”

What Does this Mean?

As a result of the Bhasin decision, the duty of honesty in contractual performance is now part of the ‘common law’ – precedents that lower courts are bound to follow, if appropriate based on the facts of a particular case. The Bhasin decision may result in more claims based on one party acting dishonestly being brought forward, and potentially in a variety of different contexts.

As one example, imagine that your business runs out of a key component required in the production of your best-selling product.  Your normal supplier does not have the component in stock and says there is a global shortage of the components.  You approach two other suppliers who tell you they have the components and you choose Supplier A, who offers you the lowest price.  You sign Supplier A’s standard form agreement, and he says that he will deliver the shipment in 10 days.  Five days later, Supplier A calls you and says that he was mistaken and that the components in question were out of stock.  You call Supplier B and find out that they now have no components in stock.  Worse, the next day you learn that your competitor down the street got a big, last minute shipment of components from Supplier A, and apparently at a much higher unit cost than the price set out in your contract with Supplier A.  Your production line is shut down for 2 weeks until your normal supplier is able to provide you with the components.  You could consider suing Supplier A for failing to fulfill the terms of the contract even though there may be a provision in the Supplier A’s standard form of agreement which exonerates Supplier A in such circumstances. Referring to the standard outlined in Bhasin, you could argue that Supplier A breached the duties of good faith and honesty by knowingly misleading you about the status of the components.

Of course, business relationships are just one of many areas where contracts are used.  It will be interesting in the months and years to come to see how the requirement of honest performance from Bhasin is applied in other areas of the law, such as wills and estates, family law (prenuptial or separation agreements) or municipal law.  Depending on how far courts are willing to apply this new requirement of honesty, the ramifications from the Bhasin decision could prove to be profound.

Impacts and What You Need To Do

While the full impact of the Bhasin decision will likely take years to be determined, the old adage about honesty being the best policy applies more now than ever.  Like many of us remind our teenage children: it’s less about what occurred, and a lot more about how you react. In other words, bad things happen sometimes, but did you own up and tell the truth?  In the example above, if Supplier A had honoured the terms of the original contract for the components, he may have received a lower unit price on the transaction, but he would have avoided months if not years of protracted negotiations and litigation that resulted from the lie to the first customer. 

If, as a wise businessperson, you operate your business in an honest and ethical manner, then the Bhasin case will likely not impact the way you do things.  If, however, you ever find yourself in the unpleasant position of being harmed by a dishonest party, then you may have a cause of action against that party, regardless of whether or not the action is permitted under the terms of your contract.

 

Cameron Mitchell is a business lawyer at SorbaraLaw – one of the largest and most respected regional law firms in Ontario – where he specializes in creating and negotiating all kinds of business contracts.  With more than 30 lawyers, several of whom are listed in Best Lawyers in Canada or are Certified Law Society Specialists, SorbaraLaw provides legal services to corporate, governmental and individual clients throughout Ontario.  In addition to corporate law, our lawyer’s specialty areas include employment law and civil litigation, real estate transactions, municipal law and family law.

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Human rights legislation prevents employers from discriminating against employees based on national or ethnic origin, race, ancestry, or other enumerated grounds. Some forget, however, that human rights laws across Canada also prohibit employers from discriminating against prospective employees or job applicants.

A recent case from the Human Rights Tribunal of Ontario acts as a reminder and serves as a lesson on how not to act towards prospective employees.

Ottawa Valley Cleaning and Restoration, a company located in Ottawa, was ordered to pay $8,000 plus interest to Mr. Malek Bouraoui, an individual who had sought employment with the company but was subsequently denied employment.

Bouraoui submitted a job application to Ottawa Valley Cleaning in June 2013. He was later contacted by a man named Jesse, who asked Bouraoui what country he was from and about his race. Bouraoui informed Jesse that he was not from Canada. Bouraoui subsequently received a text message from Jesse, telling him “try learning English you will have better luck I don’t hire foreners (sic) I keep the white man working.” Bouraoui responded back and commented that the text messages were discriminatory and if they continued, he would file a complaint against the company. Jesse continued to send text messages of a discriminatory nature and in one particular text, he wrote, “go file a complaint he will probably be a white man and he will probably laugh at you and tell you to go away.”

The adjudicator accepted the printed versions of the text messages that Bouraoui submitted as evidence. The company’s failure to respond to the allegations, file supporting documents or participate in the process was not viewed favourably by the Tribunal. In its decision, the Tribunal said, “Though the applicant’s interactions with the respondent were of a very short duration, the contents of the text messages sent to the applicant are not only discriminatory but they are egregious and abusive in nature”.

Here are some lessons to take away from this case:

  1. While an employer has full discretion as to who it wishes to hire, decisions for hiring and termination should not be based on discriminatory grounds.
  2. An employer may be found liable for discriminatory comments made by an employee or an agent of the employer. Employees who interact with prospective employees or the public must be informed about their obligations to abide by human rights laws in Ontario and Canada.
  3. It may be in the employer’s best interest to have a company policy on how to deal with prospective employees, especially those who are not selected for the position. A clearly and carefully worded response to unsuccessful job applicants may be advisable.

Employers would be well-advised to keep these considerations in mind when accepting job applications or discussing employment opportunities with prospective employees.

Article written by: Abira Balendran
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Too little attention is paid to cross-border tax traps. Even when advice is sought, the response is often incomplete or simply wrong because it is restricted to the jurisdiction—and residents of that jurisdiction—in which the particular tax advisor happens to practise. As a result, many step blindly into that space where jurisdictions intersect, specialized domestic rules apply, and treaties govern.

A situation commonly encountered by Canadians in their personal lives is the application of U.S. estate tax. While it is generally known that this tax applies to Florida vacation properties, it is not so well known that: (i) this tax applies to many other assets besides; and, (ii) a treaty exemption is often available. As a result, U.S. estate tax issues are too often missed, and time and money is wasted on unnecessary or ineffective trusts.

What Canadians should understand about U.S. estate tax is this: U.S. taxpayers are subject upon death to an estate tax on the total value of their worldwide assets. This tax applies at graduated rates ranging from 18 to 40% currently subject to an exemption for the first $5,340,000 of asset value. Non-U.S. taxpayers are also subject to this tax in respect of U.S. real estate, U.S. securities, certain U.S. debt obligations, U.S. business assets (unless held through a corporation), U.S. mutual funds, and interests in certain trusts such as RRSPs, RRIFs, RESPs, and TFSAs that hold U.S. assets. Unlike U.S. taxpayers, Canadians are entitled under U.S. law to an exemption of only $60,000 of asset value. U.S. estate tax therefore extends well beyond the Florida condo. But does this mean that all U.S. assets should be thrown into a trust?

In many cases, the Canada-U.S. tax treaty provides Canadians with a full exemption from U.S. estate tax. Specifically, the treaty provides that Canadian taxpayers are entitled to the same $5.34 million exemption as U.S. taxpayers in proportion to the percentage of worldwide assets located in the U.S. In other words, if 50% of your estate value is attributable to assets otherwise subject to U.S. estate tax then you are entitled to 50% of the $5.34 million exemption.

Since the application of U.S. estate tax is determined by both the estate value and the percentage allocation to the U.S., one cannot make generalized assumptions. These rules must be understood and the analysis performed in each case. If, having done the analysis, one concludes that U.S. estate tax does apply, then and only then should one consider placing ownership in a trust. And, here again, one must be wary since the trust must be drafted to accommodate both Canadian and U.S. tax and legal considerations. Any old trust will not do. Only a trust prepared by Canadian and U.S. lawyers in collaboration will avoid U.S. estate tax without triggering unexpected legal or tax consequences on either side of the border. There is no such thing as a one-size-fits-all trust.

When, therefore, you seek advice on any matter involving more than one jurisdiction, ensure that your advisor is well-versed in the legal and tax issues on both sides of the border as well as in the possible application of treaties. If necessary, consult counsel in the other jurisdiction—because the world is not as small as it was and the cost of ignorance will always exceed the cost of proper planning.

Article written by: Patrick Westaway
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A recent case decided in Ontario’s Superior Court of Justice interprets a section of a homeowner’s fire insurance policy that does not appear to have previously been judicially considered.

An accidental fire destroyed the house. The homeowner was covered under a fire insurance policy which included a Guaranteed Replacement Cost on Buildings (GRC) endorsement.

The homeowner decided to buy a home in another location rather than rebuild the insured property.

The homeowner claimed as his loss the amount of the fire coverage under the GRC endorsement. The insurer said that their liability under the policy was limited to the face amount of the basic fire coverage because the homeowner did not rebuild on the same location.

Both parties agreed that the rebuilding costs on the original location would have exceeded the amount of the basic fire coverage.

After a detailed analysis, the Court concluded that the homeowner was not entitled to the higher GRC amount and his claim was limited to the basic fire coverage.

The GRC endorsement stated that the homeowner was only entitled to the higher coverage if the house was rebuilt “on the same location”.

The homeowner argued that the choice of a replacement home at a different location unnecessarily limits the additional coverage which the homeowner paid for with the GRC endorsement.

It has long been recommended that the GRC endorsement should be carefully considered by the homeowner, as it transfers the risk of calculating the rebuilding cost to the insurer for an additional premium.

This case highlights the necessity of carefully reading the fire insurance policy and reviewing your plans with your agent to avoid disappointment in the event of a loss.

Article written by: Gary Keller
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In Egan v. Burton [2013] O.J. No. 2408, the parties had been married for twenty years with the husband having brought into the marriage a cottage which he had owned prior to the parties’ marriage.  The husband paid for all the expenses for the upkeep and improvements to the cottage.  The wife did not contribute to the operation or maintenance of the cottage during their marriage aside from some ordinary housekeeping.  The parties had resided at the cottage from May until September almost every year of their marriage.

At separation the parties disagreed upon whether the cottage constituted a second matrimonial home.  In this case the Court held that the evidence clearly showed the parties had used the cottage when they were spouses.  The court found that:

“ “family residence” must mean some-thing more than two spouses using the cottage.  I consider that evidence of the intention of the parties, at the time of their use, must be part of the analysis.  To do otherwise would be to undermine the purpose of the section which is remedial and intended to achieve a fair result where the parties have treated a cottage or a second home as a family residence with both parties contributing in one way or the other as one would expect a family home – which was registered only in the name of one of the parties – and after separation for the other party to be told you have no interest.”

The court held that the wife never treated the cottage as a family residence.  Unlike the matrimonial home, she made no contribution to the cottage.  Therefore, the Court held that the cottage was not a matrimonial home.

This case is a significant departure from prior cases in which the courts have generally found a cottage, vacation property and even a second occasionally-used residence to be a matrimonial home.  For example, in Oliver v. Oliver-Estate 2012 ONSC 718, a Toronto condo was found to be a second matrimonial home. In that case the condo was only being used by the husband when he came to Toronto for medical treatments or as a transit point if the couple was flying somewhere from Toronto.

At this time there appears to be a conflict in the jurisprudence on the issue of determining whether a cottage is a second matrimonial home.  It will be interesting to see how the courts deal with this issue in the future.

Couples should give consideration to whether or not there is a need for a marriage contract prior to getting married.  It would be prudent to meet with a family law lawyer to discuss your situation and determine whether a marriage contract would be appropriate.  Marriage contracts are especially important if one party owns a home or cottage and is bringing that asset into the marriage, as it will likely become a matrimonial home.  Unlike other assets brought into the marriage, at separation, a spouse is not entitled to a date of marriage deduction in the event that home or cottage is still a matrimonial home on the date of separation.  For example, if an individual has $100,000.00 in a bank account on the date of the marriage, and another individual has $100,000.00 equity in a home on the date of marriage, and that home is still a matrimonial home on the date of separation, then the individual with the bank account will be given a date of marriage credit of $100,000.00 whereas the individual with the equity in the home will not be provided with a date of marriage credit.    If the intention is to keep a home or cottage separate or to obtain credit for the value of the property coming into the marriage, one should meet with a family law lawyer to discuss having a marriage contract prepared.

In the Egan v. Burton case, if the spouses had prepared a marriage contract prior to getting married, they could have confirmed their intentions for the cottage and then likely avoided the high costs of litigating that issue.

Our lawyers in our Family Law Department would be pleased to assist anyone wishing to obtain more information on Marriage Contracts or Cohabitation Agreements.

Article written by: Jennifer Black
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Corporate Commercial – Slonee Malhotra

We are all aware of the existence of SPAM and the need to curtail these messages. Canada’s Anti-Spam Law, (“CASL”) will be in force beginning on July 1, 2014. CASL will be one of the strictest anti-spam regimes in the world. However CASL will impact both illegitimate and legitimate commercial electronic messages. Businesses must therefore appreciate the impact of CASL on the ability to communicate with customers and clients via electronic messaging.

SPAM refers to bulk messages of an unsolicited nature which often promote products or services through electronic mail, text messages, or video messages. SPAM can be used for ill purposes by those aimed at misappropriating personal data, banking information, or credit card numbers, luring individuals into scams including identity theft schemes, or defrauding consumers via counterfeit business websites.

SPAM messages are a nuisance, a drag on online commerce, and a menace for consumers. These messages have become a vehicle for a wide range of threats related to online commerce which affect both individuals and businesses.
CASL will affect individuals, businesses, and organizations by imposing regulations aimed at limiting and controlling the messages that are distributed. It is purposed to address three broad areas:

(1) commercial electronic messages (CEMs);
(2) alteration of transmission data; and
(3) the production or installation of computer programs.

The central feature and unifying purpose of CASL is to create an opt-in, consent-based regime to the receipt of these types of messages. Essentially, if a Canadian wishes to send an electronic message to a recipient that encourages the recipient to buy, sell, or lease a product or offers to provide certain opportunities, that recipient must first provide the sender with consent.

Most businesses will be largely impacted by the provisions and regulations restricting CEMs. Generally speaking, CASL requires that consent to receive CEMs must be “express consent”. In other words, the recipient of the message must have expressly agreed to receive such a message.

Under CASL, “express consent” can be oral or written. A person who seeks express consent from a recipient must meet certain prescribed criteria. Before a sender gets consent, he must, in a clear and simple manner:
identify himself by setting out prescribed information and providing contact information which must remain valid for 60 days;

outline the purpose(s) for which the consent is being sought; and
provide a free and electronic mechanism to permit recipients to indicate a desire to stop receiving the messages.

There are a few exceptions to this requirement and there are a number of situations where consent need only be implied. Express consent is not required for personal relationships, existing business relationships that involve communications via electronic messages, or for non-business relationships (i.e. messages sent by charities).

Importantly, if a business is sold, the new owner can continue sending CEMs to existing customers who have previously given express consent.

Moreover, implied consent from the receiver will be sufficient to meet the requirements of CASL where:
there is an existing business or non-business relationship between the sender and receiver;
the receiver has published or disclosed (to the sender) the address to which the message is sent without publishing or indicating that the receiver does not wish to receive unsolicited e-mails; or the message is sent according to the Regulations.

With more and more businesses sending out electronic messages to customers and potential customers, for marketing and other purposes, the impact of CASL on these legitimate business activities must be monitored. Businesses need to ensure that CEMs are delivered in accordance with the new regulations. Failing to do so could expose the company to far reaching and significant penalties under CASL. Individuals and businesses can be fined per violation, face civil and/or criminal charges, and be subject to private actions. Where compensatory damages are not awarded, recent case law has indicated that punitive damages may be warranted.

All businesses should take steps to do the following now:

Review organizational practices to determine what existing CEMs do not fall under one of the exceptions
Consider whether consent may be implied for the messages that are sent out

If consent cannot be implied, develop a system to obtain express consent. Make sure to follow the requirements under both the Act and Regulations when sending out requests for express consent

Ensure the existence of a system to reliably record the express consents gathered
Develop another system to track messages that fit under implied consent and make certain that each consent remains valid

Implement an “unsubscribe” policy and ensure requests to unsubscribe are complied with according to the time periods outlined under the Act

Will your business be prepared once the Act comes into force? To learn more about how the new Act will impact your workplace, please contact our office to schedule a meeting with a member of our Corporate-Commercial Group.

Article written by
Slonee Malhotra

 

* * This article is intended only to inform and educate. It is not legal advice.  Be sure to contact a lawyer to obtain legal advice on any specific matter.

Real Estate – Jacquelyn Johnson

If you are thinking of purchasing a home in the near future, the federal government has implemented some new mortgage rules that you need to be aware of. These new rules came into effect July 9, 2012, and will affect home buyers or owners who are mortgaging a property.

Most notably, for new government-backed insured mortgages, the amount of equity that can be borrowed against a property has been reduced, from 85% to 80% of the value of the property.

Another more contentious change is the reduction of the maximum amortization period from 30 years to 25 years. An amortization period is the amount of time it will take a homeowner to pay back the principal amount of a mortgage. This new shorter period means that the principal will be paid back quicker by the borrower, resulting in savings on the total amount of interest paid on that principal amount. However, it also means that the individual payments will be higher because there is less time to pay the principal back in full. This change has the effect of decreasing the total cost of a home a buyer is able to finance.

In making these changes, the government is attempting to help homeowners build up the equity in their homes quicker and to pay off their mortgages sooner, with the ultimate goal of strengthening Canada’s housing finance system. Finance Minister Jim Flaherty is seeking to cool down what many experts see as an “overheated” mortgage market, with many Canadians carrying debt loads that are beyond their comfort ranges. In fact, the average rate of debt to disposable income currently in Canada is an alarming 152%.

But in spite of the Minister’s aggressive push to inform the public of these new rules, a recent poll conducted for the Bank of Montreal showed the majority of Canadians are unaware of the changes.

Given that a home is the largest purchase most Canadians will make in their lifetimes, it is important to be aware of the rules and consequences relating to the mortgages used to finance such purchases.

* * This article is intended only to inform and educate. It is not legal advice.  Be sure to contact a lawyer to obtain legal advice on any specific matter.

 

Author: Jacquelyn Johnson is a Lawyer at Sorbara, Schumacher, McCann LLP, one of the largest and most respected regional law firms in Ontario. Jacquelyn may be reached at (519) 741-8010 or <jjohnson@sorbaralaw.com>.   

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Corporate Commercial – Real Estate – David Sunday

When a landlord’s commercial premises are up for lease and the leasing broker locates an interested tenant, it is quite common for the prospective landlord and tenant to sign an agreement to lease as a first step towards putting in place a final lease agreement.

While an agreement to lease is no substitute for a final lease, it is important for prospective landlords and tenants to understand that signing an agreement to lease often has the same legal effect as signing a final lease itself.

Ontario’s Courts have said that, to be valid and enforceable, an agreement to lease must show the parties, give a description of the premises, set out the commencement and duration of the term, the rent, and all the material terms of the contract that are not just incidental to the relationship of landlord and tenant.  If these requirements are met, then an agreement to lease may be legally enforced, even though the parties did not ultimately agree on the final form of lease.

If the requirements for a binding agreement to lease are not met, then an agreement to lease will usually only be considered an “agreement to agree” or an “agreement to negotiate”.  In law, such “agreements to agree” are not generally treated as legally enforceable contracts.  However, even an agreement to agree may have enforceable provisions with respect to certain matters, such as forfeiture of deposit monies, and the entering into of an agreement to lease may trigger broker commission obligations.

Often agreements to lease contain a clause that says that the tenant will accept the landlord’s standard form of lease when presented subject only to minor modifications to make it consistent with the terms of the agreement to lease.  It is one thing to have such a clause included when the landlord’s standard form of lease is available to the tenant and reviewed before the tenant signs the agreement to lease, but potentially unfair to the prospective tenant if the landlord’s standard form of lease is not provided to the tenant until after the agreement to lease is signed.  Notwithstanding the potential unfairness, the Court’s will enforce such agreements to lease if the legal requirements set out above are met.

To avoid problems, parties to an agreement to lease should always ensure that:

  • the agreement to lease is clearly drafted and fully understood by both parties;
  • the agreement to lease clearly states whether it is intended to be a binding agreement to lease or non-binding in nature;
  • the agreement to lease clearly sets out the rights of the parties insofar as preparation and acceptance of the final lease agreement is concerned;
  • the agreement to lease clearly sets out what happens in the event the parties fail to agree upon a final form of lease (e.g., Are parties entitled to walk away? Are deposit monies forfeited?); and
  • any conditions included in the agreement to lease with respect to lawyer approval are clearly drafted, reflect realistic timelines, and confer sufficient rights as to allow for meaningful lawyer review and comment.

Before signing any agreement to lease, landlords and tenants should ensure that their interests are fully protected and should ask themselves if they could abide by the terms of the agreement if it were legally enforced even in the absence of a separate finalized lease agreement.

* * This article is intended only to inform or educate. It is not legal advice.  Be sure to contact a lawyer to obtain legal advice on any specific matter.

 

Author: David Sunday is the Group Leader in the Municipal, Land Use & Development Law Group at Sorbara, Schumacher, McCann LLP, one of the largest and most respected regional law firms in Ontario. David may be reached at (519) 741-8010 or<dsunday@sorbaralaw.com>.

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Real Estate – David Sunday 

Ontario has commenced a formal review of the Condominium Act.  Although the review is still underway, the review panel has issued a first recommendation to require condominium managers to hold certain mandatory qualifications.

The Ministry of Consumer Services has already endorsed this early recommendation, due to its relatively broad support across most stakeholder groups, including from the Association of Condominium Managers of Ontario.

Property managers across Ontario and Waterloo Region will want to monitor this development and ensure that they are ready when mandatory qualifications become a reality.

The Stage Two Condominium Act Review report is expected to be available for public comment by the end of summer 2013. Expect it to provide further detailed recommendations with respect to the types of mandatory qualifications that are likely to be required for condominium managers at some time in the future.  You can watch for the report online at:

http://www.sse.gov.on.ca/mcs/en/Pages/condo_rev.aspx

* * This article is intended only to inform and educate. It is not legal advice.  Be sure to contact a lawyer to obtain legal advice on any specific matter.

 

Author: David Sunday is the Group Leader in the Municipal, Land Use & Development Law Group at Sorbara, Schumacher, McCann LLP, one of the largest and most respected regional law firms in Ontario. David may be reached at (519) 741-8010 or<dsunday@sorbaralaw.com>.

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