If the home is not in the same condition as when you made the offer, you should tell your real estate agent and also discuss with your real estate lawyer.

In Ontario, there is a clause in the standard Agreement of Purchase and Sale that makes the seller liable for damages that occur between signing and closing. This is called a risk allocation clause.

Your lawyer will want information about the seller’s insurance policy and to review the APS in addition to the estimate for repairs.

If the damage is substantial, the buyer may choose to cancel the transaction and get their deposit back. They could also choose not to back out and instead receive money from the seller’s insurance policy. All the options must be reviewed discussed with all parties: seller, buyer, their lawyers and the insurance company. The lawyers can recommend the best way forward.

The seller’s home insurance policy will terminate the day you take possession. If you find any problems after you move in, you’ll have to discuss next steps with your lawyer.

Hence a pre-closing visit is very important for the buyer to ensure the home they bought is in the same condition as when they made their offer, and that the seller has fulfilled conditions mentioned in the APS.