The Supreme Court of B.C. handed down a ruling Tuesday that clarifies one aspect of pre-sale condominium contracts, allowing one owner to abandon his contract for a multi-million dollar suite near Vancouver because of an incomplete disclosure statement.
The decision involved a man who put down a 10 per cent deposit on a $3.5 million suite on the UBC endowment lands west of Vancouver.
Five months later, Timothy Dwane and his wife had their first look at the unit being developed by Coast Development Partnership and they weren't happy with what they saw. Dwane claimed the view and the privacy of the unit were not what had been promised by the marketer and developer.
It was not the just obscured view that got Dwane out of the contract, however. The court found the disclosure statement that was provided to Dwane when he bought the unit wasn't complete, because it did not include three amendments, which altered the size and density of the units in the building, removed a wine cellar from his unit, and changed the fees.
The Honourable Madam Justice Lynn Smith wrote that it's the responsibility of the seller to include amendments in its disclosure material to the buyer, and found Dwane did have the right to rescind the contract. The ruling means Dwane will get his $350,000 deposit back with interest earned.
Clarifies rules of real estate marketing
As CBC News has previously reported, there are dozens of cases currently before the courts of people who put deposits on condominium units when the market was red hot, and now, for various reasons, are trying to walk away from them.
Real estate lawyer Ron Usher told CBC News Tuesday that now that the real estate market has turned somewhat, people are taking a close second look at the contracts they signed. The ruling clarifies a section of B.C.'s Real Estate Development Marketing Act.
"It's typical, as you might expect, that you have a piece of legislation that was drafted in the theoretical backroom of the legislative policy branch, and of course it's now being stress-tested in this stressful market," said Usher, who was not the legal counsel in the case.