A Hold Back in Vancouver Real Estate

Far too often, Sellers in Vancouver agree to do things that they don’t end up doing. A Vancouver Real Estate transaction could result in a Buyer being responsible for thousands of dollars in repairs or future payments if a Seller does not do what they agree to do. A Hold Back in Vancouver Real Estate is an excellent way to ensure that what a Seller agrees to in an Accepted Offer gets done.

What is a Hold Back in Vancouver Real Estate?

A holdback is when the Buyer’s Lawyer keeps some (or “holds back”) of the money the Buyer is paying the Seller for a specific purpose for a set period AFTER the Buyer has bought the property. At the end of the period for the Hold Back, the money can be released by the Buyer’s Lawyer to the Seller if the money is not used for the specified purpose.

Why use a Hold-Back?

Often in a Contract of Purchase and Sale, the Seller is responsible for repairs to a property before the Completion Date or payments to a third party after the Completion Date as part of the deal.

A holdback ensures sufficient money for any future payments the Seller fails to pay and if the Seller doesn’t do the required repairs before the Completion Date. A Buyer does not have to rely on the seller’s word but can have tangible evidence that the Buyers Lawyer holds money set aside for the agreed work or payments.

Holdbacks can be very good to use with Sellers who are overseas or are challenging to find, as well as those who have not been acting in good faith. Suing a Seller is VERY expensive and time-consuming. It is far easier and simpler to have money set aside when the Contract of Purchase and Sale is negotiated to ensure that what the Seller agrees to occurs.

Hold Backs are often used in new construction. I’ll discuss Holdbacks soon in a series of Videos on how to buy a pre-construction property in Vancouver.

Buying Your First Home? Check out my series of videos for First Time Home Buyers!

Looking for Tips on Selling a Condo in Vancouver? Check out the videos on How to Sell a Vancouver Condo!

I STRONGLY ENCOURAGE comments, questions, and anything else you have to say in the comment section below!

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