Country road made of black lava ash with many deep road holes.There are some more Iceland photos in my portfolio. Here is a selection:

Protecting clients from pandemic potholes

This pandemic has put a stranglehold on more than business and social life. It has also opened up some legal and procedural potholes and pushed the normal processes of selling, buying, conveyance, contracts, deposits, writs and enforcement into some tight corners.

Order of possession

In a recent NewsReal, we shared what an Order of Possession means for landlords and tenants during the current emergency order. The Residential Tenancy Branch told us that if a notice to end tenancy is dropped before the March 30 emergency order to suspend evictions, the tenant is obliged to leave, unless they are required to remain in place due to illness or quarantine.  

In normal circumstances, the Order of Possession would be enforceable and the landlord would be able to obtain a writ of possession from the Supreme Court to enable a bailiff to force the tenant to vacate premises on the date of the writ. 

However, we have learned that because we are not living in normal circumstances, the chances of getting that writ of possession and a bailiff are remote at best. Even if a buyer, for example, managed to get as far as getting a writ of possession, that writ may be quashed because of the current emergency order not to evict tenants. That is, if anyone can get into the courts at all. 

Due to the pandemic, the courts are also largely diminished in capacity right now, and only critical cases are in the front of the line, such as criminal and family law.  But if they do hear a case about tenancy, they are not in the frame of thinking to supersede the government’s orders.

QUOTE: “The courts have a constitutional responsibility to oversee British Columbia’s use of its authority, but they will approach the government’s decisions with considerable deference.” Lawyers Lara Nathans & Trevor Lawson of McCarthy Tétrault

So, buyers should know that tenancy in a property during this pandemic can come with complications unless the parties involved are content to leave things as they are, until the world gets back to some sense of normality.  

Domino effect

Another risk that has opened up in the pandemic era is the liability of transactions that won’t complete due to the current economic uncertainty. Some clients, whether sellers or buyers, may have been counting on making a real estate deal earlier in the year, and now find themselves without an income due to layoffs, or business closures. 

Let’s say the two-income Smith family made a deposit on a home, and then the economy shut down; they now have zero to minimum income to get financing approval or hold a mortgage. They may lose their substantial deposit, which is bad enough. But how does that affect the other parties?

Now, the sellers of that property. Mr. and Mrs. Jones, though able to claim the deposit, still have a property to sell, but if needing to sell sooner rather than later, are likely forced to lower the original price to get it sold. Why? Because they too have placed a deposit on a property and they can’t renege on their purchase or find themselves down the same pothole. And so it goes. You may end up with a domino effect of three or four transactions that collapse all because the first couple didn’t have the ability to complete the purchase. 

Inevitably, lawyers and notaries will be kept busy during this unusually difficult time, which is a good thing because their advice at this time could save buyers and sellers alike headaches and financial losses.

Does COVID 19 equal Force Majeure or Act of God? 

Somehow, despite the setbacks that the pandemic has wrought on all our lives, we can feel a bit better knowing that governments and some companies are finding ways to ease the pain. And in that spirit, the Canada Revenue Agency has pushed the deadline for filings taxes to August and many landlords are loosening their schedules to permit commercial tenants to remain in place while we wait for the economy to find stability.

But we can’t count on loopholes for everything. Recently, the company TicketMaster enraged many of its customers by announcing that concerts that are postponed are not eligible for refunds. We also found out that some banks are still charging interest for every day that mortgage payments are not paid. 

For some, the pandemic is a special circumstance that is beyond anyone’s control, and spells Force Majeure (Act of God), which one would hope absolves some of us from financial obligations prior to the pandemic. Not so!  

Business in Vancouver recently published an article titled: Buyers can’t get out of home purchase contracts because of COVID-19in which lawyers make the point that a clause to protect a buyer from backing out of a property purchase would need to have been specifically written into the purchase contract.

Additionally, the Vancouver office of law firm McCarthy Tétrault, recently published a comprehensive, readable explanation of the ins and outs of Force Majeure in the context of the pandemic