Real Estate Law. Real-World Lessons.

Every week, Ontario courts deliver decisions that reshape how real estate deals play out - impacting your closings, commissions, and client relationships. But who has time to sift through 50+ pages of legalese?

We do.

Clause & Effect breaks down Ontario’s biggest real estate cases into clear, practical takeaways for realtors, mortgage advisors, and investors. No fluff. No Latin. Just sharp lessons you can actually use.

Let’s dive in!

When Roger and Caroline sold their Ottawa home privately, they thought it was simple: a standard OREA Agreement of Purchase and Sale, clean deal, no inspection. But a friendly “Feature Sheet” they sent the buyers before signing - complete with notes like “new garage doors coming,” “saltwater pool,” and “includes blinds” - came back to bite them in Small Claims Court.

The September 2025 decision in DeFazio v Roy shows how even if the law looks crystal clear, judges sometimes follow their gut.

The Case: Friendly Deal, Expensive Fallout

The sale started casually. The buyers were represented by Andrea’s father, a real estate agent. Negotiations were friendly and informal, handled mostly over email. Before the offer, the sellers emailed a “Feature Sheet” describing the property’s highlights.

The buyers relied on it. They waived inspection and signed the APS for a spring 2022 closing.

Key terms of the APS included:

• Section 4 (Chattels): Appliances, blinds, and fixtures included “as is.”

• Schedule A: Only the pool and related equipment were warranted “to be in good working order on completion.”

• Section 26: Entire agreement clause - everything not written in the APS doesn’t count.

• Inspection: Waived.

After closing, the DeFazios noticed problems:

• No new garage doors had been installed.

• The “saltwater” pool wasn’t saltwater.

• Pool jets, filters, and pumps weren’t working.

• The master bedroom blinds were missing.

They sued in Small Claims Court, arguing the sellers’ Feature Sheet and emails created misrepresentations that they relied on when making the deal.

⚖️ The Court Showdown: When Law Meets “Fairness”

This is where it gets interesting.

The sellers argued exactly what most lawyers would:

The Feature Sheet isn’t part of the contract. The entire agreement clause wipes out any side promises. And since the buyers waived inspection, caveat emptor applies (i.e. buyer beware and they bear the risk of not inspecting the property).

In most cases, that’s correct. Courts have repeatedly said that informal marketing materials don’t override a signed APS.

The buyers countered that the sellers made specific representations, especially about the new garage doors and saltwater system, and that they reasonably relied on those when signing. They said they only learned the truth after closing.

🧑‍⚖️ The Decision: Buyers Win (Partially)

The judge took a surprisingly sympathetic view. He found there was a “special relationship” of trust because of the friendly communications and that the Feature Sheet, while technically outside the contract, amounted to negligent misrepresentation.

He awarded $10,819.89, broken down as:

• $5,000 for the uninstalled garage doors (based on the Feature Sheet promise)

• $2,149.25 for the missing saltwater system (based on the Feature Sheet promise)

• $2,907.89 for pool repairs (under Schedule A’s “good working order” clause)

• $762.75 for missing blinds (under Section 4 of the APS to be included as a chattel)

The rest of the buyers’ wish list didn’t survive.

Their claims for the aging dishwasher and stacked washer/dryer (said to be barely working) and the non-functioning pool jets and waterfall feature were all rejected. The court held that none of these were covered by the APS.

There was no warranty on chattels being in good working order and the pool warranty applied to the operation of the pool itself, not its features (despite the fact that the APS stated “pool and related equipment”).

Extremely confusing, I know. But, the judge said, these items fell under caveat emptor.

Key Takeaways (Without the Legalese)

1/ “Entire Agreement” isn’t a bulletproof shield.

Lesson: Judges may look past the contract if they think a buyer relied on what was said or shown.

2/ Pool warranties cover function, not fancy.

Lesson: The court ordered payment for the pump and filtration system but not decorative jets. If a pool clause says “good working order,” assume it covers operation only.

3/ Don’t assume you have a slam dunk.

Lesson: Even when the contract and law seem on your side, judges can surprise you. Litigation risk is never 0%. Document everything, keep promises narrow, and manage expectations early.

Questions or advice needed on your next closing? Reach out at [email protected] or call 519-997-3775.

Solid contracts ensure seamless closings.

Until next time.

-Christian