The House I Bought Is Trashed on Possession Day – Now What?

I thought this post was a great post and was definitely worth sharing! 

Posted by:

Marc Kelly

Monday, 13 April 2015

I hope you enjoy it!


Buying a home is supposed to be one of the greatest days in the world for adults.  For first time home buyers, many will have immense pride that they were able to purchase such a significant asset.  If it is a second or third home, individuals are excited to upgrade their space, or downgrade into something that better fits their lifestyle.

On a rare occasion, however, the dream of a new home becomes a nightmare.  Buyers get into the property and find out it has changed significantly from the last time they saw it. Problems can include soggy floors, plumbing problems, poorly installed replacement fixtures and general damage.  At a time when money can be tight because of all the new expenses being incurred, the last thing you want to find is a need for a fix up.
In Saskatchewan, there is usually no immediate remedy that your lawyer can provide unilaterally.  Under the standard trust conditions – the enforceable promises lawyers make to one another to ensure the deal closes - (and most variations thereof), if you have been granted possession, your lawyer has either already paid the money over to the other lawyer to close the deal, or is committed to do so.  The lawyer cannot in those cases stop the flow of money just because their client is unhappy with some aspect of the transaction. (There are a few very technical points where the funds need to be returned, but I will leave that for a different article)  Hopefully, your lawyer explained that to you before you got to this point.
That being said, doing nothing is not a very palatable answer - So what can you do now?
Here my top five list of steps to take if you have a disaster waiting for you when you take possession of your home purchase:
#1 – Call your lawyer
‘But Marc, you just said that your lawyer can’t do anything, didn’t you?’ – I said that your lawyer can not do anything unilaterally.  However, we might be able to assist in reaching an agreement between the parties, including a holdback or the payment of some damages.  If we cannot do that, we can talk to you about some of your options, including litigation.
#2 – Call your Realtor
I put this as #2 because they likely saw the property with you at the time that you got the keys, and saw the damage to the property at that time.  They have likely contacted the other Realtor to figure out what happened, and to try and negotiate on your behalf.    Follow up with them to see if a resolution is coming.
#3 – Document and Investigate the Damage
This is not exactly the Instagramming that you were hoping to do on your possession date, but it is time to pull out that camera phone and start taking pictures or video.  Different experts may be able to advise you on signs that the damage was done some time ago, or signs that the problems were covered up by previous owners.  A quick trip over to your new neighbours’ house to chat about the damage might also give some insight into the problems that the former owner may have been aware of.  Unless you are going make the problem worse by delaying the fix, take the time to gather the proof of what happened.
It is also helpful if you can figure out the cost of the repair.  It is much easier to settle something when money is still floating around on the sale of a property.  If you can get some good estimates, it might be worth it to float a reasonable settlement proposal to the other party as early as possible. If the resolution can settle quickly, it is in everyone’s best interest.  However, you may need to sign a waiver to resolve the claim, and so you want to be absolutely sure in those case that you are not expecting any more related damages.
#4 – Investigate Any Possible Warranty/Insurance Claims
This is probably less likely to be a source of resolution, but depending on the reason that the damage was caused, it is possible that an existing warranty or insurance coverage would be required to contribute to the cost of the repair.  Investigate those claims on a timely basis, as they often have restrictions on how long you have to report, and steps that need to be taken to validate the claim.
#5 – Smack Your Head If You Did Not Take Appropriate Prevention Steps
It is not normal in Saskatchewan to do a pre-possession walkthrough on used residential properties.  On new properties, it is very common, and is described in most construction contracts. 
Given the industry norm, negotiating a pre-possession walkthrough on a used property is appropriate in very limited circumstances.  I would suggest it in cases where there are supposed to be significant improvements done to a property or repairs done to some existing damage.  Also, as part of that inspection, you want to ensure that you have an outcome for an unsatisfactory inspection.  This could include a holdback until the work is completed, or requiring this to be a condition on the purchase of the property.  
Bonus Tip:  Go Buy a Cheesecake
Take it from a chunkier guy - cheesecakes solve a lot of problems.  
Posted by:  Marc Kelly,, Monday, 13 April 2015

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Robin Gyimesi

Robin Gyimesi

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CENTURY 21 John DeVries Ltd., Brokerage*
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