When a buyer fails to close, the deposit is where the seller's claim starts, not where it ends.
I act for sellers only.
I do not act for buyers. If you are a buyer who cannot close, wants out of a deal, needs more time, or wants a deposit back, I am not able to help, and the lawyer handling your purchase is the right person to call.
When a buyer does not complete an Ontario real estate transaction, the seller's loss is rarely the deposit alone. A seller forced to relist into a softer market can claim the shortfall on resale plus the cost of carrying the property in the meantime, and those numbers routinely run well past six figures. The weeks immediately after the failed closing shape the outcome more than anything that happens later.
What a Seller Can Actually Recover
- The deposit. Ontario law generally permits a seller to retain it on a buyer's breach even without proof of loss, subject to a narrow judicial discretion to relieve against forfeiture.
- Resale loss. The difference between the contract price and what the property eventually sold for, which in a declining market is the largest head by a wide margin.
- Carrying costs. Mortgage interest, property taxes, insurance, utilities and maintenance for the period between the failed closing and the resale.
- Costs. Ontario follows the loser pays rule, so a successful seller ordinarily recovers a portion of legal fees on top.
The counterweight is mitigation. A seller must act reasonably to resell, and a seller who relists at an unrealistic price, refuses reasonable offers, or sits on the property will find the claim reduced accordingly. What you do in the first month is evidence.
When the Buyer Blames the Appraisal
The most common reason buyers give for not closing in Ontario right now is the appraisal gap: the lender values the property below the agreed price, the mortgage advance falls short, and the buyer cannot fund the balance. A financing shortfall is generally not a legal excuse for failing to close an unconditional agreement. From the seller's side, that means the claim usually stands, and the real questions are how much was lost on resale and whether the buyer can pay.
Can a Seller Force the Buyer to Complete?
In principle a seller can ask the court to order the buyer to complete the purchase. In practice Ontario courts rarely grant that to a seller, because money usually compensates a seller fully. The ordinary route is to resell the property reasonably and promptly, then claim the shortfall, the carrying costs and legal costs from the buyer who defaulted.
Before You Sue: Can They Actually Pay?
This is the question I would rather answer at the first meeting than at the end of a file. A judgment against a defendant with no assets is an expensive piece of paper. It is worth establishing early what the buyer owns: equity in other property that a writ can attach, income that can be garnished, a guarantor, a corporate buyer with assets, or another party further up a chain of failed transactions with more to lose. Where recovery is unrealistic I will say so before you spend money finding out.
Related work: enforcing a judgment once you have one, construction liens on new builds, and civil litigation generally.