Naomi and Jordan Bannister put their home up for sale in Moncton, N.B. this spring and in late April a woman made an offer for the $229,000 asking price and agreed to paid separately for the appliances. She gave the Bannisters her lawyer’s name and the name of the company that would be financing the deal, adding that she needed to move into the house within a couple of days.
According to an article in the Moncton Times & Transcript two weeks ago, here's what happened next:
The Bannisters agreed to vacate and rent the house to the buyers for a month to allow the purchase details to be finalized. They also made arrangements to move to Ontario where they stayed with Naomi's parents pending Jordan's new job in Tennessee.
When the Bannisters tried to cash the rent cheque, it bounced. The Bannisters then learned the couple didn’t have the financing to buy the house and the lawyer who was supposed to be handling the deal had not been retained.
They made immediate efforts to get the people out of their house, but the couple resisted, saying they had the right to stay there. Then Naomi’s father-in-law visited the home with an RCMP officer and the couple was warned that if they took possession using fraudulent means, they could be charged.
After a lot of anguish, a threat that utilities would be cut off and an eviction notice, the couple finally moved out, the newspaper reported.
The Bannisters lost thousands, related to moving expenses, the storage of their belongings and lost wages. Because of that, Naomi told the paper they plan to file criminal charges against the couple.
The Bannisters were fortunate to get the tenants evicted so quickly. In Ontario, landlords do not have the right to cut off utilities and the police will usually not get involved. That leaves the landlord with no alternative but to go to the provincial Landlord and Tenant Board to evict the tenants, which can take months.
Whenever you are selling or renting a home, do not give the keys to the buyer or seller before you have the purchase money in your hands. If it is not a money order or certified funds, do not give out the keys until the cheque clears.
Be very careful to properly qualify any buyer or tenant in advance. Here the Bannisters should have called the lawyer given to them by the buyer immediately, before doing anything further.
To avoid this ever happening to you, remember the following:
Never guarantee a loan or add your name to a mortgage unless you fully intend to purchase the property.
Always know who you are doing business with, if you are buying, selling or renting a home. Conduct proper background checks in advance.
Never sign anything until you know exactly what you are signing.
Find out who actually owns any property you are thinking about buying or renting. You either can go to the government registry offices to do a search for a fee, or you can ask a real estate agent or lawyer to assist you, as they have access to the government Teranet computerized search system. If any deposit is required, make sure the funds are paid to the actual owners.
Never give out keys until the cheque clears.
Remember, if it sounds too good to be true, it is.
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Mark Weisleder is a lawyer, columnist, author and speaker to the real estate industry. You can contact Mark at firstname.lastname@example.org
Source: moneyville.ca via email from Mark Weisleder