Sidney Troister and Aaron English, partners in our Commercial Real Estate Group, were featured in the Toronto Star regarding their recent article on Considering COVID-19 Clauses in Purchase and Sale Agreements.
A respected real estate lawyer has sounded the alarm against using untested COVID-19 clauses in property transactions.
Sidney Troister is a partner at Toronto's Torkin Manes LLP, and is widely regarded as one of Ontario's leading real estate lawyers.
Last week, Troister and his law partner Aaron English distributed an e-bulletin cautioning against the use of these clauses.
The first clause they say "raises a number of issues and questions" provides for an extension of closing if the buyer's lender, or the local land registry office, should cease operations. If the delay exceeds a particular date, the clause allows either party to terminate the transaction.
Troister and English warn that giving either party the right to terminate could allow a dishonest or insincere party to use the clause as an excuse for ending a transaction that otherwise should not be cancelled.
Another clause concerning the lawyers states that if there is a delay in registration of the title documents, the closing will be extended past the scheduled date to the "next possible date," and there will be an "escrow" or trust closing where funds and keys may be exchanged.
The Torkin Manes bulletin notes that this clause does not specify how the closing will take place or what would be involved in such a complex arrangement. Under this clause, a buyer would be in the purchased property paying expenses but the seller would not get his money to pay off the mortgage.
To read more, click here. This article was originally published in the Toronto Star.
Originally published 27 April 2020
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