Part 35 published on 01/09/11
Purchase agreements declared unenforceable due to developer’s failure to disclose material amendments
The Court allowed the applications of two purchasers for return of their purchase deposits. The Court held that their agreements (for the purchase of strata lots) were unenforceable due to the developer’s failure to give them details of material amendments (ie. amendments to the disclosure statement) as required by the Real Estate Development Marketing Act.
The Court’s decision included the following:
1. A substantial delay of many months in a completion date is, in British Columbia, material;
2. A change in a project from a single phase to two phases is material;
3. A change in ownership, or control, or of the directors of the developer does not ordinarily mean that the identity of the developer has changed;
4. A change in the developer’s financing may or may not be material; and
5. A developer is obliged to provide each purchaser with all amendments to its disclosure statement until closing.
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I find, as well, that the changes noted in the amendment of January 20, 2009, respecting the change from a one phase to a two phase development, and the extension of the outside completion date, were, in all the circumstances, material. They were changes that could well have affected the price, value and use of the plaintiffs’ units.