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When your purchase is not properly represented...many things can go wrong!

Here is a case to learn from...This happened in 2005 (during a very hot market).

Mark and Sandy bought a new house in Chilliwack directly from the builder. They agreed on the contract price, terms and the completion dates. The house was about 6 weeks from being fully finished.
Due to the lack of representation many items in the contract were omitted.
Two weeks after the family moved into their new house, they found a letter from a local law firm informing them that a lean was placed on their title. The lean holder was a plumbing company that did the plumbing.
It turned out that the builder never paid the plumber for their work and apparently had no intention to do it now that the house had sold. The plumber demanded his $7,800 or else.

This is Unfair! Why should we pay for the plumbing twice!?
When we bought the house, the plumbing was included wasn’t it?  These were their words when I meet them, to see if I can advise them on a solution.

This whole issue could have been avoided if the contract was properly drafted.
When new construction homes are sold, we protect the buyer by withholding 10% of the value of improvements for 55 days from the time the occupancy permit is issued. Example: If the cost to build the house is $ 250,000 then the buyer’s lawyer would withhold $25,000 and keep it in his trust account for 55 days. If there were any unpaid debts or contract invoices the contractors have 55 days to place a lean on the property.
So in this case, if the plumber had come with a request to get his invoice paid then there would have been money to pay him.

In the end, Mark and Sandy did solve their problem but this experience left them bruised. They no longer trust a handshake agreement and they promised me that they will always get a professional opinion before committing to any contract.

Tibor

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