You may be a seasoned real estate professional or a first-time homebuyer, but either way, you can encounter legal disputes related to buying and selling or owning property in Canada. Being aware of the most common real estate conflicts can help you understand the transactions smoothly and protect your interests if a disagreement arises.
This article outlines three common real estate disputes you can face in Canada. Understanding the basics of these common clashes and your rights and responsibilities can empower you during the exciting yet complex process of a real estate transaction. With the right preparation and perspective, you can avoid or manage disputes effectively. Read on to learn what to watch out for and how to approach each potential conflict.
Find out the 3 most common conflicts Canadians encounter when it comes to real estate disputes.
Owning a clear title to your property is important for an owner. A property title refers to the legal ownership of real estate and the rights associated with the ownership. Without a clear title, you could face disputes from third parties claiming ownership or legal rights over your property.
To avoid potential title disputes, conduct thorough due diligence before buying a property. Review the property's history and all documents establishing ownership, including deeds, surveys, mortgages, liens, encumbrances, and property tax records. Check if any third parties could claim ownership or legal rights, such as through adverse possession. Adverse possession refers to settlers acquiring legal ownership over time.
Even with due diligence, issues can arise. Two common title disputes are boundary disputes and fraud disputes. Boundary disputes occur when the legal boundary lines are unclear or disputed by a neighbour. Fraud disputes arise when the title is obtained illegally, such as through forged documents. In both cases, you may need to go to court to settle the dispute.
To proactively reduce risks, consider buying title insurance which provides financial protection from losses due to defects in the property title that were not discovered during the due diligence process. While not mandatory, title insurance gives you peace of mind that your property rights will be defended should any issues emerge.
Overall, performing thorough due diligence, reviewing documents establishing legal ownership, and considering title insurance are careful steps to avoid the most common real estate title disputes in Canada. Following best practices will help ensure your property title is clear, allowing you to freely enjoy your real estate ownership rights.
The third most common real estate dispute Canadians encounter is disputes arising from disagreements over property conditions and disclosure in real estate transactions.
Disputes often arise regarding the condition of a property at the time of sale. As a buyer, you should conduct a thorough inspection of the property before finalizing the purchase to identify any major defects or necessary repairs. If serious issues are discovered after closing that were not properly disclosed by the seller, you may have grounds for legal action.
Sellers in Canada have a legal obligation to disclose any known material defects with a property. If a seller fails to disclose major defects that majorly impact the property’s value or your intended use of it, you may be able to seek compensation for the cost of repairs or even the reversal of the buying agreement. However, proving failure to disclose can be difficult, so buyers should do their due diligence to determine the property’s condition.
If disputes arise over property conditions or disclosure, there are a few options for resolution:
With proper inspections and disclosure, many common real estate disputes can be avoided. But when issues do arise, knowing your options for resolution can help ensure a fair outcome.
As a landlord, you need to be aware of your rights and responsibilities regarding tenants and tenancy disputes. The Residential Tenancies Act (RTA) governs most residential tenancies in Canada. Under the RTA, landlords must provide tenants with adequate notice before entering the unit, as well as ensure the rental unit is in a good state of repair.
Tenant issues can arise for various reasons. Nonpayment of rent is a common problem. In this case, you must first issue a notice to vacate for nonpayment of rent, providing the tenant reasonable time to pay the overdue amount or move out. If the tenant does not comply, you may apply to terminate the tenancy and evict the tenant.
Damage to the property beyond normal wear and tear is another issue. As a landlord, you have the right to charge tenants for any damages over normal wear and tear. You must provide adequate notice and evidence of damages before withholding any amount from the security deposit. Failure to do so can result in legal trouble.
To avoid tenancy disputes, carefully screen prospective tenants, conduct regular unit inspections and issue proper notices as needed. Maintain open communication with your tenants and address any issues promptly and professionally. Seeking legal counsel regarding tenancy laws and disputes in your province is also advisable to confirm you are acting within your rights and responsibilities as a landlord.
Real estate disputes can arise in various ways during property transactions in Canada. Being aware of the common disputes around deposits, inclusions, and condition representations can help you avoid them.
Seeking legal advice at the outset and documenting all agreements in writing is wise. If you do face a dispute, try negotiation first, but don't hesitate to obtain counsel if needed to protect your interests in the matter. With proper precautions, you can reduce the chances of these issues occurring. Stay informed, know your rights and responsibilities, and you can understand the real estate market with greater confidence.
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Khan Law is a boutique law practice that has been providing legal services to the Greater Toronto Area since the year 2000.
