CONDOMINIUMS – Purchase and sale of – Deposits- Disclosure Statement- Termination of purchase agreement- Refund of Deposit – Residential unit – Real Estate Development Marketing Act – Real Estate.
Appeal by the buyer of real estate, Essalat, from a order giving $1,136,000 to the developer, Burrard Residential, for the deposit on a luxury Condominium. On August 12, 2007, Essalat signed an offer to purchase a real estate unit. The total purchase price for the real estate was $6,019,948. On August 13, 2007, Burrard accepted the offer to purchase. The contract had Essalat paying the deposit of $1,136,000 in five installments. Essalat paid the first installment of $100,000 on August 12 and the next installment of $184,000 on November 19, 2007. He made no other payments. On January 15, 2010, Burrard gave notice that the closing date for the purchase of the real estate unit would be January 27, 2010. On January 25. 2010, the city of Vancouver issued an occupancy permit for the real estate unit. Essalat refused to finish buying the unit on January 27, 2010. Burrard went to court to keep the deposit that Essalat had agreed to pay. Essalat claimed that on September 25, 2009, the developer sent a newsletter to her stating that there would be a two months delay. Burrard did not file any change to the disclosure statement. Essalat claimed that because they failed to file it that Burrard could no longer enforce any terms in the purchase agreement against her and in could not forfeit the deposit. The Real Estate Development Marketing Act (REDMA) required the filing of a disclosure statement with the superintendent of Real Estate. It must set out start and completion dates of all real estate development, as well as delivery of the statement to a buyer. Here, the problem was with the completion date. When Essalat entered into an agreement to buy the unit in August 2007, Burrard knew since March 2007 that it would be finished later than the date in the disclosure, September 2009. Burrard did not then amend the statement changing the date. The trial judge found that, as Essalat had notice that completion would be later. The statement was not “false or misleading” within the meaning of Real Estate Development Marketing Act. The court decided that the agreement to purchase real estate was enforceable, even thought there was an incorrect completion date.
HELD: appeal allowed. The original court decision was dismissed. The trial judge made a mistake in interpreting the phrase “false or misleading”. This term is clearly defined in Real Estate Development Marketing Act. Informal notice of change in completion date was not acceptable. The Real Estate Development Marketing Act mandates a formal amendment to the statement or else the purchase agreement for real estate is unenforceable. The Real Estate Development Marketing Act balances strict guidelines of what must be given with a mechanism to adjust things if there are unforeseen circumstances. However the strictness of the of Real Estate Development Marketing Act has to be maintained in order for the protection to be meaningful to the consumer. Without the Real Estate Development Marketing Act filing system, disclosure disputes would have to be decided on a “who said what to whom” basis. An individualized approach could also lead to inconsistent results for different buyers within the same real estate project.
299 Burrard Residential Limited Partnership v. Essalat, (2012) B.C.J No. 1244, British Columbia Court of Appeal. I.T Donald, P.A Kirkpatrick and C.E Hinkson JJ.A., June 21, 2012. Digest No 3214-010