Part 53 published on 01/02/16
Forty percent increase in declarant’s budgeted common expenses may constitute a material change entitling purchaser to cancel transaction
The plaintiff had agreed to purchase a unit in a hotel condominium which was being developed by the defendant.
Between the date of the purchase agreement and closing of the transaction, the purchaser learned that the declarant’s budgeted common expenses (for the condominium) had increased by 40%. The transaction failed to close, and the question was whether or not the purchaser was entitled to repayment of the purchase deposits. The Court held that the purchaser was entitled to repayment of the deposits. The failure to close the transaction was not the result of any failure on the part of the purchaser. The Court also held that the increase in common expenses may have constituted a substantial change to the disclosure statement, and yet the defendant had not triggered the limitation period in Section 74(5) of the Condominium Act (namely a time limitation within which the purchaser could seek to cancel the purchase agreement), because the defendant had never provided notice of the change to the purchaser. In short, the limitation period had not been brought into application in this case.