Buying Inducements must be Disclosed
An Alberta court has ruled that the contents of a lawyer`s file in a real estate transaction may be disclosed to the police when no legal advice was provided to the client, and the circumstances give rise to a presumption that a crime was committed.
Back in April 2007, Christopher and Roya Gour began the process of buying their first home in Edmonton. They contacted a local realtor, Sanjay Sharma, who showed them a house listed at $405,900. He did not reveal that he was the seller as well as the agent.
When the Gours expressed concern that they would not be able to afford the renovations needed on the property, Sharma informed them that the seller would give them a "renovation credit`` of $40,000 on the purchase.
On May 1, 2007, the Gours agreed to buy the house for $405,000 and signed the paperwork.
ResMor Trust Company agreed to provide financing for $364,500 without knowing about the $40,000 renovation credit. As a result, it unknowingly financed the entire purchase price.
Sharma referred the Gours to David Westra, a local lawyer who would represent seller, buyer and new mortgage lender in the transaction. The deal closed June 30, 2007, and the Gours moved in.
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