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!

What happens when buyers skip closing, ignore follow-up, and then claim the deal was never binding because they didn’t waive conditions?

That was the dispute in the Small Claims Court decision Lloyd v. Coote (released August 27, 2025), where an Oshawa seller waited, relisted, and finally sued, only for the buyers to argue that the APS was “null and void.” The court had to decide: does silence cancel a deal?

The Case: Conditions Ignored, Deposit on the Line

Arabella Lloyd agreed to sell her Oshawa home to Brian and Sonia Coote with a $5,000 deposit.

The APS included financing and inspection conditions that required written waivers or notices of fulfillment. But, none were ever sent.

Despite that, both sides kept moving toward closing. The buyers arranged inspections, sought financing, and their lawyers exchanged closing documents.

Then, on January 15, 2020 (i.e., the closing day), the buyers failed to close, pointing to higher-than-expected property-tax arrears as their reason for backing out.

Two weeks later, Lloyd relisted and sold the home for $5,000 less. She eventually sued in Small Claims Court for $10,000, claiming the lost value and the deposit.

The Court Showdown: Was the Deal Ever Binding?

The Buyers argued:

• The APS became null and void once the written conditions weren’t waived.

• Since the contract lapsed, the Seller wasn’t entitled to keep the deposit.

• Even if valid, the claim was out of time — they said any loss was known by January 2020 when the resale closed, so suing in August 2022 was too late under the Limitations Act.

The Seller argued:

• Both sides acted as if the deal was binding — inspections, financing, and closing prep — so part performance prevented the buyers from denying the contract.

• Once the buyers failed to close, the deposit was automatically forfeited under the APS.

• The limitation clock on the deposit didn’t start in January 2020 because she didn’t yet know the buyers wouldn’t release it. They and their agent went silent for months, delaying discovery.

• It was only by late August 2020, after repeated unanswered requests, that she realized legal action would be needed — making her 2022 claim timely.

The Decision: Seller Wins

The Judge ruled that the Buyers COULD NOT rely on the “null and void” clause after performing substantial steps toward closing. Their conduct confirmed a binding deal.

The court accepted that the resale-loss claim was out of time — Lloyd knew the exact loss when she sold two weeks after the failed closing. But the deposit dispute was different. The buyers’ prolonged silence delayed discovery of their refusal to release it, so that part of the claim was timely.

The court also noted she acted reasonably by reselling within two weeks — strong mitigation that preserved credibility.

Result: Lloyd was awarded the $5,000 deposit plus $128.97 in pre-judgment interest and 3% post-judgment interest.

Side Bar: Even if the resale claim was filed before the two year limitation period, the court hinted the deposit ($5,000.00) might have offset the $5,000 loss anyway, leaving little net recovery.

Key Takeaways (Without the Legalese)

1/ Acting like the deal is firm makes it firm.

Lesson: If written waivers aren’t delivered, don’t assume the deal dies. When buyers keep inspecting, arranging financing, and exchanging closing docs after the condition period, courts treat the APS as binding.

2/ Don’t sit on a failed deal.

Lesson: If a deal collapses and you’re unsure when the limitation starts, err on the side of caution and file early. Claims can be amended later, but expired ones are gone for good.

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