Holiday Closure

The OREA office will close for the holidays at 12 p.m. Tuesday, December 24th.  Normal business hours will resume on Thursday, January 2nd.  Happy Holidays!

Holiday Closure

The OREA office will close for the holidays at 12 p.m. Tuesday, December 24th.  Normal business hours will resume on Thursday, January 2nd.  Happy Holidays!

December 15th - 2003

OREA clauses tackle tough issues

Insurance issues topped the list of priorities for home inspections this past year.

Insurance issues topped the list of priorities for home inspections this past year. Knob and tube wiring, 60 amp service and underground oil tanks were some of the issues that made obtaining home insurance difficult. OREA has a number of standard clauses to assist REALTORS in completing transactions on homes that are "less than perfect."

According to Graham Clarke of Carson Dunlop Home Inspection Services, "There is no such thing as a perfect home. However, even if a home inspection report states the knob and tube wiring is in good shape or an oil tank is not leaking, insurance companies are reluctant to provide coverage."

Other issues that arise during a home inspection include environmental conditions such as mold or asbestos contained in vermiculite insulation. Since the environmental issues go beyond the scope of a home inspection, inspectors don't identify them in their reports, but may caution purchasers when it's warranted, and direct them to seek further evaluation by a specialist. Many homes that were used for grow house operations, were found to have some form of moisture damage or defects in the heating system.

For REALTORS, ensuring sellers disclose any and all defects and recommending a home inspection for buyers is their best defence against possible litigation. An OREA "Seller Property Information Statement" allows the seller to disclose any flaws, and some of the OREA standard clauses can help to "close the deal". Here are a few examples of the OREA standard clauses or conditions developed to help REALTORS deal with some of these issues when drafting an offer:

Conditional Upon Obtaining Insurance - Cost not to Exceed
"This offer is conditional upon the Buyer obtaining insurance on the property for the following named perils:

At a yearly cost not to exceed __________________ excluding applicable taxes.

Unless the buyer gives notice in writing delivered to the Seller not later than ___ p.m. on the ____ day of ______, 20__, that this condition is fulfilled, this offer shall be null and void and the deposit shall be returned to the buyer in full without deduction. This condition is included for the benefit of the buyer and may be waived at the buyer's sole option by notice in writing to the Seller within the time period stated herein."

Underground tank warranty
"The seller represents and warrants that the fuel oil tank in, on or about the property is in compliance with the requirements of the Technical Standards and Safety Act, 2002 and any Regulations thereto as amended from time t time and has been registered with the Technical Standards and Safety Authority and does not have to be removed, upgraded or replaced before October 1, 2006. This warranty shall survive and not merge upon the completion of this transaction."

Growth or Manufacture of Illegal Substances - Acknowledgement
"The buyer acknowledges that the use of the property and buildings and structures thereon may have been for the growth or manufacture of illegal substances and acknowledges that the seller makes no representations and/or warranties with respect to the state of repair of the premises and the buyer accepts the property and the buildings and structures thereon in their present state and in an "as is" condition."

To view all of OREA's standard clauses visit the "My OREA" section of the OREA website at www.orea.com.

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Privacy law just around the corner Clauses reindexed

For more information contact

Ontario Real Estate Association

Jean-Adrien Delicano

Senior Manager, Media Relations

JeanAdrienD@orea.com

416-445-9910 ext. 246

Ontario Real Estate Association
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