An unfinished site plan obligation nearly derailed a family's upsizing purchase

The situation

The plan had been ordinary enough. Nasrin, a baker, and Eitan, who worked as a transit operator, had outgrown their townhouse with two children and a third on the way, and had found a semi-detached home in Markham that fit their budget, in the low five hundred thousands, with room to grow into over the years ahead. Their own sale was already conditionally accepted, their mortgage pre-approval was in place, and the closing date lined up with the end of the school term, exactly when they wanted to move so their older child would not have to change schools mid-year.

The home they were buying sat in a small block built a few years earlier as part of an infill development, several semis and townhomes constructed together under a single approval from the municipality. That kind of approval, once granted, is usually invisible to a buyer; the homes look finished, the streets look finished, and nothing about walking through the property or standing on the driveway suggests there is any unfinished business sitting behind it in a municipal file somewhere.

The seller, Dov, had bought the home new from the original builder and was now moving out of the region for work, on a timeline of his own that he wanted to keep tight. His lawyer moved quickly from the start, pushing for an accelerated closing and limited conditions, which read at first as simple eagerness to get the deal done rather than anything Nasrin and Eitan needed to think twice about. Nasrin and Eitan, wanting the same speed for their own reasons, were inclined to agree to whatever kept the timeline intact and got them into the new home before the term began.

It was only when our office ran the standard title search, earlier than usual because of the compressed timeline Dov's lawyer had proposed, that something surfaced neither Nasrin nor Eitan had any way of knowing about on their own: a site plan control agreement registered against the property years earlier, with servicing obligations tied to it that did not appear to have been formally closed out by the municipality.

Neither of them had ever heard the term before, and their first reaction, reasonably enough, was to ask whether it meant the deal was off. It did not, but it meant the closing they had planned around was suddenly not as simple as it had looked a day earlier.

What the law actually said

A site plan control agreement is a document a municipality enters into with a developer before allowing certain construction to proceed, and it typically sets out requirements for things like grading, drainage, landscaping, and shared servicing infrastructure, matters the municipality wants secured before it signs off on a development as genuinely complete. These agreements are registered against the title of the land, which means they can bind whoever owns the property later, not just the original developer who signed it and long since moved on.

In this case, the original builder had posted security with the municipality to guarantee that certain servicing work, storm drainage connections shared across the small block of homes, would be completed to municipal standard before the file was closed out. Our search showed the agreement was still registered and, based on the municipal file, the security had not yet been released, which typically only happens once the municipality has inspected and accepted the completed work in writing.

That did not automatically mean the work was undone. It commonly means only that the paperwork closing the file has not caught up, which happens routinely and usually resolves itself without anyone ever noticing or asking. But it also does not mean the work is finished, and a buyer standing in the driveway has no reliable way to tell the difference between the two. What matters legally is that until a municipality formally releases an agreement like this, an unresolved obligation can, in principle, follow the land to its next owner, and a purchaser who closes without addressing it takes on a small but real risk of being drawn into a dispute over work they had nothing to do with creating.

Because this was infrastructure shared across several properties rather than something isolated to Dov's home alone, the practical stakes were more than theoretical. If the servicing work genuinely had gaps, a new owner could eventually be asked to contribute toward correcting them, entirely apart from any promise made at the time of purchase and regardless of how little they knew about the agreement when they bought.

We also had to consider what would happen if the municipality took its time confirming the file status, since planning departments do not always move at the pace a real estate closing needs. That risk shaped how we approached the next step as much as the substance of the agreement itself did.

What we did

1. Ran the title search early rather than on the original timeline. Dov's lawyer's push for an accelerated closing meant we compressed our own review schedule to keep pace with the deal, and that acceleration is precisely what put the site plan agreement in front of us well before closing rather than at the eleventh hour, when there would have been far less room to negotiate a fix and the family's own sale would have been at far greater risk.
2. Reviewed the registered agreement itself before making any assumptions. We read through the full site plan control agreement and its schedules line by line to understand exactly what work it covered, what security had originally been posted against it, and who was named as responsible, rather than reacting to the bare fact of its existence and guessing at what it might mean for the closing.
3. Contacted the municipality's planning department directly. We requested the current file status on the site plan agreement and the security posted against it, rather than relying on the registered document alone, since only the municipality could confirm whether the underlying servicing work had actually been inspected and accepted, and a registered agreement by itself could not tell us that, no matter how carefully it was read.
4. Learned the servicing work was incomplete, not just unpaperworked. The municipality's response confirmed that a stormwater connection shared by the block of homes had failed a prior inspection and had not yet been corrected, which told us the obligation was still live and not, as we had hoped it might turn out to be, a closed-out formality waiting on paperwork alone.
5. Went back to Dov's lawyer with the finding. Because Dov's side had pushed for an accelerated closing and minimal conditions from the outset, they were poorly positioned to argue that an unresolved servicing obligation should simply pass to Nasrin and Eitan unaddressed, and that earlier posture became genuine leverage once we raised the finding and proposed a way to resolve it before closing.
6. Proposed a holdback rather than a delay. Instead of pushing the closing date, which risked unravelling the family's own conditional sale and the school-year timeline they were counting on, we proposed that a portion of Dov's sale proceeds be held in trust until the servicing work was completed and the municipality confirmed in writing that the agreement could be released.
7. Negotiated the holdback amount against a contractor estimate. We obtained a written cost estimate for the outstanding servicing correction from a contractor familiar with the type of work involved and set the holdback at a figure that comfortably exceeded it, so Nasrin and Eitan would not be exposed financially even if the actual repair cost somewhat more than projected once the contractor was on site.
8. Documented the release conditions in writing before closing. We set out, in a signed agreement between the parties, exactly what proof of municipal acceptance would release the holdback funds to Dov, so the arrangement could not become a second dispute months later once the family had already moved in, unpacked, and simply wanted the whole matter behind them for good.
9. Kept Nasrin and Eitan informed without alarming them unnecessarily. We explained the issue and the plan to resolve it in plain terms, focused on what it actually meant for their closing date rather than the technical detail of the registered agreement, since their real and reasonable concern throughout was always whether they would move on time with two young children.

The outcome

The purchase closed on the date the family needed, with roughly the estimated cost of the outstanding work held back from Dov's proceeds rather than left as a risk on Nasrin and Eitan's new home. They moved in on schedule, before the school term began, without ever having to explain to their children why the plan had almost fallen apart or why the moving truck might not have shown up when promised.

Dov completed the servicing correction through the original contractor within a few months of closing, the municipality confirmed the work met standard, and the holdback was released to him once that confirmation was formally in hand. Nothing about the arrangement cost Nasrin and Eitan anything beyond the ordinary legal work of setting it up; the financial risk sat with the party who had created it, not with the family who had simply wanted a bigger home for their growing children.

The turning point in the file was not a clever argument so much as a timing accident that worked in the family's favour: Dov's own push for speed forced an earlier title search than we would otherwise have run on a typical file, and his lawyer's early insistence on minimal conditions left them little room to resist a holdback once the servicing gap came to light. A more cautious opening move by the other side, one that left more room for negotiation from the start, might have kept the issue hidden until much closer to, or even after, closing, when the family's options would have been far more limited.

Nasrin and Eitan settled into the home without further incident, and the site plan agreement was eventually released from title once the municipality's file was fully closed out, leaving nothing behind for them to think about the next time they sold.

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