Warranties In Sale Agreements

Originally published at irvinschein.com.

The recent case of French Family Funeral Home Limited v. Player et al. provides a useful review of the rights and obligations of parties to a real estate transaction where one party misrepresents the state of the property but the innocent party knows about it before closing, and goes ahead and closes anyway.

In this case, the property in question was located in Kirkland Lake, Ontario. The parties entered into an agreement of purchase and sale that included a warranty on the part of the vendor that there were no environmental issues concerning the property.

After a number of hiccups, the deal finally closed. As part of the deal, a portion of the purchase price was covered by way of promissory note from certain individuals involved in the company that took title to the property. The note was never paid and the vendor sued the individuals who had signed the note.