What Happens If I Cannot Get a Mortgage After Making an Offer in Alberta?
This answer covers the law of Alberta.
If your mortgage falls through after you make an offer in Alberta, what happens depends mostly on whether your contract has a financing condition and on its exact wording. A standard contract is used for residential purchases, and it sets out financing terms including the deposit amount. How a financing condition is removed, waived or ends, and the notice needed, is set by that contract, so read it closely and get a lawyer to confirm before any date passes.
A deposit held by a brokerage is trust money, so it is kept apart from the brokerage's own money. It may be paid out only under the written terms of the trust agreed by all parties. Money must be deposited within 3 business days, counted from acceptance of the offer when it comes with an offer. Who keeps the deposit if the deal ends depends on your contract and the facts.
If the deposit does not arrive or a cheque is not honoured, the brokerage must notify all parties in writing. Any claim over a deposit must generally be brought within 2 years of when you knew or ought to have known of it, or 10 years after the claim arose, whichever expires first.
Key takeaways
- What happens when financing falls through depends on whether your contract has a financing condition and how it is worded.
- How a financing condition is removed, waived or ended, and what notice is needed, is set by the contract, so confirm it with a lawyer before the date passes.
- A brokerage must keep your deposit apart from its own money and can pay it out only under the written terms of the trust agreed by all parties.
- A claim over a deposit generally must be brought within 2 years of when you knew or ought to have known of it, or 10 years after the claim arose, whichever expires first.