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CONDOMINIUMS - Purchase and sale of - Deposits - Disclosure statement

Thursday, October 17, 2019 @ 8:50 AM  


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Appeal by the purchaser from a judgment ordering forfeiture of a deposit. On November 2, 2016, the appellant entered a contract to buy a pre-construction detached condominium from the respondent. The contract and subsequent amendments provided for a closing date of December 21, 2017. The purchase price was $1.7 million. The appellant paid a deposit of $133,000. On the closing date, the appellant's solicitor advised the respondent that he reserved the right to rescind the agreement based on a material change arising from the failure to construct certain common elements prior to the closing date. The respondent took the position that there was no material change in the disclosure statement, and that the appellant's failure to close the transaction justified termination of the parties' contract and forfeiture of the appellant's deposit. Two weeks later, the appellant rescinded the agreement and demanded the return of her deposit. Litigation ensued. The application judge ruled that the appellant breached the agreement, entitling the respondent to terminate, retain the deposit, and sue for damages. A trial was ordered to quantify damages over and above the forfeited deposit. The purchaser appealed.

HELD: Appeal dismissed. The application judge did not err in interpreting a purchaser's right of rescission under the Condominium Act. Late construction of the parkade and entry gates was not a material change of circumstances. The chambers judge did not err in characterizing the gates as amenities rather than essential features of the development. Time was not of the essence with respect to construction of the common elements. The respondent appropriately pled the whole of the agreement of purchase and sale in support of its position, providing a basis to rely on the forfeiture provision to retain the appellant's deposit.

Lin v. Brookfield Homes (Ontario) Ltd., [2019] O.J. No. 4563, Ontario Court of Appeal, G.R. Strathy C.J.O., J.C. MacPherson and M.H. Tulloch JJ.A., September 9, 2019. Digest No. TLD-October142019009