When the customer refuses to buy

Job loss, separation, dissatisfaction following a visit, change of mind or simply the existence of a better opportunity. All these reasons are sometimes cited by promising buyers to justify their refusal to follow up on their promise to purchase, regardless of where the work is at. What to do when that happens?

It is first necessary to check when the contract between the parties was concluded. This information is important because the Act¹ provides that the promisor-buyer may withdraw from his promise to purchase within 10 days of the conclusion of the preliminary contract², in which case the seller may receive, if his contract so provides, compensation that may not exceed 0.5% of the agreed selling price. Consequently, the seller has every interest in receiving a deposit covering at least the compensation provided for in the Act and in waiting for the expiry of the period before incurring costs in customizing the housing unit.

But if the promisor-purchaser's deadline to exercise his right of withdrawal has expired, what happens? The answer is not always the same and will depend on several factors, including the terms of your contract or the reasons given by the promising buyer. Each case remains a case in point.

Thus, some promising buyers may potentially be released if the seller is in default or committed serious breaches with respect to certain elements of the contract. The seller, if he suffers damage resulting from the unilateral refusal of the promisor-buyer to comply with the preliminary contract, must therefore ensure that he has respected his part of the contract and the validity of the contract before requesting compensation. For example, let's mention promising buyers released because the seller was lax in dealing with their mortgage financing.

In the event that there is no legitimate way out for the promising buyer, various options may be available to the seller and it will be up to him to evaluate them according to the contract between the parties in particular. Without listing them all, the most common options are:

1. Keep the deposit as compensation for damages suffered, with or without other recourse;
2. Formulate a request for a transfer of title in order to force the sale;
3. Put the housing unit back on the market and claim from the promising buyer the damages resulting from his refusal to buy, for example, the difference between the price at the promise to purchase and the resale price or the costs related to the conservation of the building (municipal and school taxes, maintenance, etc.).

Regardless of the option chosen by the seller, he will have the obligation to mitigate his damages if he wishes to obtain compensation. It is also appropriate to give formal notice to the promising buyer in order to offer him the opportunity to reconsider his decision, otherwise an appeal will be initiated.
against him.

In conclusion, since there are several factors to consider when a customer refuses to buy, the seller has every interest in consulting his legal advisers, who will be able to guide him in the next steps.

1 Articles 1785 and 1786 C.C.Q.
2 If the seller must deliver an information note to the promising buyer and the latter is not delivered at the time the contract is signed, the date of delivery of the information note will mark the beginning of the 10-day period.

Consult the source publication