Be clear about rental items listed with your real estate contract

Here in Ontario, the Agreement of Purchase and Sale provides a space to list items which are both included and excluded in the purchase price. There is also a section to specify any rental items or contracts that are to be assumed by the buyer. The most typical rental item assumed is the hot water tank. However, here in Whitby, Brooklin and through Durham Region, we are discovering that sellers may be renting their furnace, central air conditioner, or expensive tankless water heater. There are instances where sellers have replaced their windows, doors or shingles and have financed the work, making payments over a number of years.

Working with a professional Realtor can protect you from unforeseen costs or litigation

As an experienced and professional Realtor here in Durham Region, I take the time and diligently ask about items within the dwelling which may be financed, rented or not functioning properly. However, there are many agents, perhaps less contentious or skilled, often part-time, who are not careful or professional and do not ask their sellers about such items. If you are purchasing a home, a professional Realtor will ask these questions and insert specific clauses into then offer, to protect you from unforeseen costs or litigation.

A recent court case highlights this problem. A Niagara Falls home was sold with an alarm monitoring system.

Aidong Gu sold his home to Anna Carnovale on July 19, 2012. About 18 months earlier, Gu installed an alarm system with Reliance Protection and signed a three-year monitoring contract for $45 a month including tax. When he sold the home to Carnovale, under the chattels included section of the real estate contract, it said “Alarm System and equipment.”

Later, under the rental item paragraph, it said that the buyer agreed to assume the rental contract for the hot water tank. No mention was made of assuming the monitoring contract associated with the alarm system. After the deal closed, Gu continued to be billed for the monthly fee because the modem that monitored the system remained active. He thought that Carnovale was taking over the payments after closing. When he learned that she wouldn’t, he sued. The real estate agent who prepared the contract testified in small claims court that it was his understanding that Carnovale would take over the contract but that was clearly not what the contract said.

Carnovale testified that she knew nothing about the modem and never agreed to take on the payments. She expected to receive the alarm system equipment with the understanding that if she wanted to activate it later, she would call someone at Reliance to arrange this. She said she knew nothing about the monthly payments or the modem.

In a decision dated September 11, 2013, Deputy Judge Terry Marshall of the Welland Small Claims Court accepted Carnovale’s evidence that she was unaware of the ongoing charges. He dismissed the claim because the alarm system should have been listed as a rental contract, but was not.

There is no substitute for experience and professionalism. I am astounded and often frustrated by agents who are not careful and diligent with their listing information, or provide me with poorly written contracts. If you want a smooth and worry free transaction, contact me. I can provide with you 23 years of local experience, representing buyers and sellers in Pickering, Ajax, Whitby, Brooklin, Oshawa and Clarington. Or visit my website for What is Required to List a Property!


Randy Miller
Sales Representative
Re/Max Rouge River Realty Ltd., Brokerage
905-668-1800 or 905-427-1400
randy@randymiller.ca
www.randymiller.ca