What is Gazumping?
The practice known as gazumping in some parts of the world, involves one party unfairly acquiring a property by bidding more than an offer that has already been accepted, and is not a concern in Canadian real estate. This behavior is a serious breach of contract in Canadian law with sever penalties for all parties involved. A seller that breaches a firm sales contract, is likely to be successfully sued by the buyer for damages that can range into the hundreds of thousands of dollars. In addition, any party whether it be a buyer, seller or a representative real estate agent that attempts to interfere with a firm contract by encouraging one party to breach their contract can also be successfully sued for damages.
Conditions of a contract are fairly standard in a real estate contract. When an offer is put forth from a buyer to a seller, the offer may have conditions such as "Conditional to Financing" or "Conditional to the Review of the Condominium Documents" These conditions have a date that they must be removed by. If the buyers and sellers come to an agreement on price and terms, the home is considered Conditionally Sold. This constitutes a Contract that the home is sold, pending the removal of conditions. A Conditionally Sold home is a CONTRACT and other offers only be accepted as a back-up offer in the event the Conditions of this Contract are not removed.
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