Real estate lawyers and developers are increasingly encountering purchasers who disappear as market conditions shift. This situation echoes what emerged during the 2008 financial crisis, when a similar wave of purchasers walked away from signed agreements as prices fell.
This pattern is emerging for many reasons. We explore why it’s happening, what a failed closing means for developers and their counsel, why a missing purchaser can stall the legal process, and how a location investigation helps move a matter forward.
1. Why real estate purchasers are walking away from signed agreements.
Falling condominium values in Canadian markets, including Calgary, the Greater Toronto Area, Vancouver, and Lower Mainland BC, have left many purchasers holding signed agreements at prices well above current value. Recent reporting points to units closing well below their contract price as a key driver of this trend. When that gap is wide enough, we’ve seen a subset of purchasers not only walk away from the agreement but deliberately make themselves difficult to reach, an issue that requires investigative support to resolve.
2. What a failed real estate closing means for developers and legal counsel.
For developers and their legal representatives, an unfinished sale brings questions and uncertainty. In many cases, it ends with a forfeited deposit. Some Canadian courts have confirmed that a developer can also recover damages beyond the deposit itself, evaluated in the context of the transaction as understood by the parties when they entered the agreement. In Ontario, for example, recent case law has affirmed this principle, and other jurisdictions have comparable provisions. In all cases, resolution depends on locating the purchaser and serving them properly. Without it, a matter cannot reach its conclusion.
3. Missing purchasers can stall service of legal documents.
A purchaser who goes quiet may have experienced a change in circumstances or may be avoiding the legal process altogether. Whatever the reason, matters like this can hinge on finding one person. The party seeking to move forward must satisfy a court that it made genuine, documented attempts to reach the purchaser. Only once that bar has been met can a matter move forward.
4. Experienced investigators have the tools and expertise to trace purchasers who are difficult to locate.
KeyNorth Forensic Services currently supports several real estate developers whose purchasers entered into agreements and then stopped communicating. Our location of individuals work is built for exactly this situation: tracing parties who have become difficult to find, then, with the help of trusted partners, serving them once they are located.
The process begins with verification of the purchaser’s known particulars, followed by investigative research to establish their current whereabouts. When a matter calls for it, we can arrange interviews with neighbours or known associates as part of the engagement.
We document every step as it happens, creating a written record of what was searched, what was found, and what the evidence supports, regardless of whether the purchaser is ultimately located. When warranted, we also carry out further investigation as the file develops.
If you are a real estate lawyer or developer dealing with a purchaser who has failed to close and gone quiet, let’s start a conversation. Discuss a mandate with us or reach us at 613-233-8509 x 100 to see how a location investigation can support your matter.