The Real Estate Council of Ontario, in an effort to educate citizens on common aspects of real estate law, conducted a survey to see how well people in the area knew real estate law. The survey revealed some common misconceptions about real estate law and transactions.
For example, many people believed that a real estate representative could not represent both the buyer and the seller in a transaction. In Ontario, however, the agent can represent people on both side. The catch is that the buyer and the seller have to agree to the arrangement in writing first.
What happens if you make a deposit on a home you want to purchase, but your lender arrangement doesn't work out? Do you get the money back? According to the survey, most people believe that you not only get the money back, but that it is automatically refunded as long as made your offer on the property conditional upon mortgage approval. In truth, you might not get your money back.
The deposit is held in an account by the real estate broker. If the seller demands that he or she keep the money, then it won't be automatically refunded. In such a case, you might have luck seeking the funds through a court order.
Other real estate laws and rules that are commonly misunderstood according to the survey include the fact that there is not a standard legal agreement for brokers and agents and the fact that buyers and sellers do not actually have a period where they can cancel a signed real estate agreement should they change their minds.
These are just some areas where people have a misunderstanding of real estate law. Because the law is very complex, it's often helpful to have someone with experience on your side to review contracts, help with zoning and other laws and reduce the chance of a dispute in the future.
Source: The Star, "Let’s see if you know Ontario real estate law: Roseman," Ellen Roseman, accessed Nov. 06, 2015
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