What happens if the seller cannot resolve a valid requisition?

A requisition is an item that a buyer's lawyer has identified as an issue that needs to be resolved before closing. If a seller cannot resolve a valid requisition before the closing date, the seller has not fulfilled their obligation to provide the buyer with clear title. The buyer can then decide whether they want to extend the closing date to give the seller more time to resolve the issue, accept an abatement of the purchase price to account for extra expenses the buyer will incur as a result of the requisition remaining unresolved, or step away from the deal if the issue cannot be resolved and materially affects the value of the property or the buyer’s intended use of the property.

There will often be dispute between the parties regarding what exactly qualifies as a “valid” requisition. The buyer’s lawyer has to make sure they raise the issue in question before the title search date agreed to in the Agreement of Purchase and Sale, and presents a solution to the issue they expect the seller or their lawyer to undertake.

It is generally in both parties’ best interest to come to a solution that allows the transaction to close, whether that requires more time or a credit to the purchaser to compensate for the unresolved issue. If the transaction cannot close, the deposit will remain in trust with the Realtor pending an agreement between the parties about who it should be released to. If the buyer believes the issue was known to the seller and not properly disclosed, the buyer may be able to seek compensation for damages that resulted from the seller’s inability to close.