March 5th - 2006

LEGAL BEAT: Lack of support could topple deals

Are you dealing with financially sound people? REALTORS should be concerned about liens or potential liens and attempt to determine if their buyers or sellers owe monies to anyone including spouses.

Are you dealing with financially sound people? REALTORS should be concerned about liens or potential liens and attempt to determine if their buyers or sellers owe monies to anyone including spouses.

Ontario's Family Responsibility Office (FRO) works under the authority of the Family Responsibility and Support Arrears Enforcement Act, 1996. It receives every support order made by a court in Ontario.

The FRO's role is to enforce court orders for child and spousal support by ensuring that support payments flow properly from payors (people who make support payments) to recipients (people who receive them).

The FRO has the legal authority to take enforcement action against those that do not meet their family responsibilities. For example, the FRO can issue a writ of seizure and sale against a payor's property or assets. When an asset is sold, the support order will be given priority over subsequent registered and unregistered interests.
http://www.cfcs.gov.on.ca/CFCS/en/programs/SCS/FamilyResponsibilityOffice/default.htm

MERV'S COMMENTS
This provincial process is similar to federal actions under the Income Tax Act.

If the governments file one of those claims with the sheriff's office, it may delay the closing of your transaction to the detriment of all parties to the transaction. It could also potentially jeopardize your hard earned commissions.

Some practical problems are that such liens may not appear until just before a scheduled closing. And, even if you are aware of the potential of such claims, the amounts may escalate between the time of the listing or offer and the scheduled closing date.

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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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