Condo Law Digest – October 2019

Lin v. Brookfield Homes (Ontario) Limited, 2019 ONCA 706
Decision Date: Sept 9, 2019

This appeal of a Superior Court decision hinges on what counts as a “material change” to a pre-construction condominium. Ms. Lin agreed to purchase a detached condominium unit from Brookfield Homes for about $1.6 million with a closing date in December 2017. Shortly before closing, Ms. Lin’s lawyer wrote to Brookfield advising that the planned parkette and entrance gates had not been constructed, and that in the event the intention was not to construct them, Ms. Lin would reserve the right to rescind the agreement and would seek return of her deposit (about $130,000). Brookfield’s lawyers replied that there would be no material changes to the condominium and that if Ms. Lin did not complete the transaction, Brookfield would terminate the agreement and keep Ms. Lin’s deposit.

Ms. Lin commenced a court application against Brookfield seeking return of her deposit. Brookfield counter-sued, seeking a declaration that Ms. Lin had breached the Agreement of Purchase and Sale, and seeking damages. (Brookflield sold the property in June 2018 for about $300,000 less than Ms. Lin had agreed to pay.) Justice Sachs found in favour of Brookfield and ordered a trial with regard to the quantum of damages over and above the forfeited deposit.

In this appeal, Ms. Lin claims that Justice Sachs erred by finding that the parkette and gates were “amenities” rather than essential features of the condominium. The appeal judges disagreed. They found that the parkette and gates were common elements of the condominium, and that in the Agreement Ms. Lin signed, it stated that failure to complete the common elements before the occupancy date would not be considered a failure to complete the unit.

Comment: According to the Toronto Real Estate Board, the average price of a detached home in Toronto hit its high point around the first quarter of 2017 (a few months after Ms. Lin purchased her unit), dropped sharply, and had levelled off by the third quarter of 2018 (when Brookfield sold the unit.)

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