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Offers, Counter-Offers and Properly Completing Your Real Estate Deal

The Ontario Superior Court of Justice recently handed down a decision in the case of Pilon v. Rosu.  The plaintiff purchaser was interested in purchasing the defendant vendors' home.  An Agreement of Purchase and Sale was prepared and executed by the plaintiff as purchaser.  Several counter offers were exchanged by way of PDF files.  Ultimately, the real estate agent for the plaintiff sent a counter-offer that was missing the signature page. 

The counter-offer was purportedly accepted by the defendants, but a written confirmation of acceptance was not signed by the defendants, and some of the amendments in the counter-offer were not initialed by the defendants.

Several weeks later, when the omissions were noticed, a complete version of the Agreement was sent to the plaintiff's agent.

The defendants were unable to close the transaction, as they were unable to deliver vacant possession at closing.  Furthermore, the defendants' tenants had not vacated the property in time for closing.

The plaintiff brought an action for damages.

The judge dismissed the plaintiff's action on the basis that there was no binding Agreement of Purchase and Sale.  The judge held that there was no formal acceptance of the Agreement of Purchase and Sale or, alternatively, if it was accepted, there was no communication of acceptance to the plaintiff prior to the expiry of the time for acceptance and communication.

As a result of the failure of the plaintiff purchaser and both real estate agents to notice the omissions, the plaintiff not only lost an opportunity to purchase the property, but also was unable to recover expenses incurred in having the property inspected, arranging a mortgage, and obtaining legal advice.

The lesson to take from this unfortunate series of offers and counter-offers is that the parties to an Agreement of Purchase and Sale as well as both real estate brokers and real estate agents should all check carefully to ensure that each offer and counter-offer includes all pages and schedules, duly executed and initialled, and that communication of acceptance is delivered to the other party prior to the time that is specified in the Agreement.

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