Part 35 published on 01/09/11
Purchase agreements declared unenforceable due to developer’s failure to disclose all material facts
The developer failed to disclose to purchasers the fact that units in the Strata Plan could be used for short-term rentals. The Court held that this was a failure to disclose a “material fact” as required by Section 14 of the Real Estate Development Marketing Act, and accordingly found that the plaintiffs’ purchase agreements were unenforceable. The Court held that the developer was obligated to disclose all permitted uses (primary and secondary). The Court said:
…the test to be applied is whether a reasonable person would conclude that the fact in issue would affect “the value, price, or use of the development unit”. In my opinion, a reasonable person would consider the fact that some units can be used as short-term rentals a material fact, since it affects the “use” of the development unit.