By Mark Weisleder
Home buyers will typically sue sellers in small claims court over problems that arise after closing when the amount in dispute is $25,000 or less.
The main reason is that you can make the claim without a lawyer and the costs are relatively cheap. But even though you don’t need a lawyer, you are much better off with some professional advice, either from a lawyer or paralegal.
That’s because there are common mistakes people make when doing this by themselves.
Here are some of them:
- People forget that most lawsuits must be brought within two years or you forfeit your ability to sue.
- People do not sue the right person; for example, they sue a corporation without the word “Limited” at the end. Any judgment obtained may be worthless.
- They don’t provide enough evidence to justify their claim, including invoices, receipts and a clear explanation of the sequence of events.
Michael Abrams, a paralegal at abramslegal.com says that since small claims court hearings are open to the public, it is a good idea for anyone thinking about filing a claim to go watch a learn to see how they work and what the judge wants and doesn’t want.
A paralegal or lawyer will review whether your claim and give you an opinion of its merit, but more importantly, will ask whether you will be able to collect any money if you win.
If you win in court, sometimes after two years, the judge does not ask the loser for a cheque. You have to collect this money separately.
There is little point spending money and time to get a judgment against someone if you can’t collect. To garnish wages, you need to know where they work. To go after their bank accounts, you need to know where they bank. To go after real estate, you need to know where they may own property.
The cost to file a claim in Small Claims Court is $75.
To file a defence costs $40. If you use a lawyer or paralegal and you win, the fee will vary up to $2,500 but if you do win, you can ask the judge for part of your costs, up to 15 per cent of the actual claim.
But judges have a lot of discretion to vary this amount up or down. For example, if you make an offer of settlement that is refused and you end up getting more at trial, you can ask for double the fee.
Jordan Farkas, a lawyer with mrsmallclaimscourt.ca offers these tips:
- Your claim is the first document that will be read by the judge. Make sure it is not scribbled in a hurry. Make it clear and attach all receipts or documents that support what you are asking for.
- Every case will have a pre-trial settlement conference to try and settle the matter. Be prepared for this. Review your opponent’s evidence at the hearing and ask questions, so that you will not be surprised by anything at the trial.
- Make sure that any final argument you make at trial is supported by the evidence, receipts or invoices, so that it clearly sets out your position.
Also remember before making any claim that most judgments become available on the internet. If you lose, a lot of people may read about it.
Be prepared before going to Small Claims Court, so that you have your best chance to succeed.
Mark Weisleder is a Toronto real estate lawyer. Contact him at email@example.com