How to Resolve issues that arise on closing day walk-through for a property transaction in Nova Scotia.

/ Highlander Law Group/

On closing day in Nova Scotia, the buyer is entitled to do a pre-closing inspection, "walk-through" to confirm that they are satisfied with the condition of the property now that the seller has moved all of their things out.

If an issue is discovered, the seller is only responsible if:

  1. the issue is new since the buyer saw the property at the time they made their offer (like a newly broken window), or 

  2. it was a negotiated repair etc. that the seller agreed to do, that they did not complete (like fixing a leaky sink),.

So – what do you do about it? There are a couple of options

Holdback

With a ‘Holdback’, after negotiation, one of the lawyers will hold funds in trust after closing until the issue is satisfactorily resolved by the seller. The amount of holdback is usually determined by consulting with a third-party professional who would be responsible for doing the work (eg. an electrician or plumber).  Once the work is complete to the buyer's satisfaction and receipts are provided, the lawyer will release the money to the seller.

A Credit

In this case, the buyer gets a reduction in the purchase price paid to the seller to compensate the buyer for the anticipated cost of resolving the issue. The negotiated amount of the credit is established in a similar way as a holdback. This is not always a precise science and there is some risk the repair will cost more than estimated.

It is important to note that both parties have to agree to do either of these things. If no agreement is reached – the deal either doesn’t close, or the buyer chooses to go ahead and close without the issue getting resolved or the buyer getting any money for the issue. This is part of why it is so important to have a good realtor and lawyer on your side to help you navigate these possible issues on closing day.

If you have an upcoming transaction and you are looking for assistance please reach out!! We would love to help. 

Check out this video series with helpful tips to ensure a smooth closing.

Check out our other blogs on closing day:

By: Briana O’Grady – Lawyer

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