Humber/Ontario Real Estate Course 4 Exam Practice

If a buyer's lawyer finds encumbrances on the chattels included in a home sale, what should they do?

1. Consult the statement of adjustments for details on these encumbrances.

2. Remove the chattels from the agreement and proceed with the sale.

3. Send a requisition letter to the seller's lawyer.

4. Refuse to finalize the sale immediately.

5. Request a meeting with both buyer and seller.

6. Exclude the encumbered items from the purchase price.

The correct answer is: Send a requisition letter to the seller's lawyer.

When a buyer's lawyer discovers encumbrances on chattels that are included in a home sale, the appropriate course of action is to send a requisition letter to the seller's lawyer. This is because the requisition letter serves as a formal request for clarification, additional information, or remedial action concerning the encumbrances. It allows the buyer's lawyer to address any concerns directly with the seller’s representation and to discuss potential solutions, such as clarifying the implications of these encumbrances or negotiating how they might be resolved before finalizing the sale. This approach not only maintains proper legal protocol but also ensures effective communication between the parties involved. By addressing the issue through the requisition process, the buyer’s interests are safeguarded, and it ensures that all legal obligations and liabilities are clearly understood before proceeding with the transaction. Consulting the statement of adjustments or simply removing the chattels from the agreement does not adequately resolve the legal implications of the encumbrances. Refusing to finalize the sale or requesting a meeting without addressing the specific encumbrances through formal channels could lead to miscommunication or oversight. Excluding the encumbered items from the purchase price without proper negotiation could also leave the buyer vulnerable to unexpected liabilities. Hence,