A collapsed closing is primarily a contract problem
BCFSA notes that it cannot require a seller to perform under a real-estate contract or award damages in a private contractual dispute. Those issues may require legal action. See BCFSA’s current home-buying information.
The signed contract, amendments, subject removals and completion documents are therefore central.
Buyer default and seller default can produce different claims
A buyer who cannot obtain financing or simply refuses to close may face a claim for losses caused by breach. A seller who refuses to convey the property can also face contractual remedies. The available remedy depends on the facts, mitigation and whether damages are adequate.
Specific performance may be sought in some property disputes, but it is not automatic merely because land is involved.
Market movement can change the financial stakes
If a property must be resold after a buyer breach, a falling market can produce a substantial price difference. In a rising market, the damage analysis may look different. Carrying costs, commissions and other consequential losses can also become disputed.
The non-breaching party generally needs to act reasonably to mitigate losses rather than allowing avoidable losses to accumulate.
Deposits are connected but separate
A deposit can become a major issue after a failed closing, but possession of the deposit does not always resolve the entire damages claim. BCFSA explains that where a transaction does not complete and the parties dispute entitlement, release of brokerage-held funds may require agreement or court process.
See the dedicated deposit disputes guide.
Evidence to preserve immediately
- Contract of Purchase and Sale and all addenda
- Subject-removal documents
- Financing communications
- Conveyancing correspondence
- Notices of breach or tender documents
- Appraisals and later resale documents
- Receipts for carrying costs and other claimed losses
Questions people often ask
Can financing failure excuse a buyer after subjects are removed?
Not automatically. The contract wording and any remaining condition must be reviewed.
Does the seller always keep the deposit?
Deposit entitlement can be disputed and does not necessarily determine all other damages.
Can a buyer force the seller to complete?
Specific performance may be available in some cases, but it is a discretionary remedy and depends on the circumstances.