Last summer, I blogged on the ever expanding body of jurisprudence arising from purchasers of “pre-built” condominiums attempting to use their rescission rights provided under the Real Estate Development Marketing Act (British Columbia) (“REDMA”) to avoid completing their condominium purchases. In particular, my blog related to the more developer friendly decision in Sharbern Holding Inc. v. Vancouver Airport Centre Ltd.
On January 24, 2012, Associate Chief Justice Cullen of the British Columbia Supreme Court released Bosa Properties (Edgemont) Inc. v. Ban (“Bosa”). This is a further decision regarding REDMA and, in particular, it adds to the line of cases relating to the legal effect of an inaccurate estimated completion date included in the Disclosure Statement for the project. The twist in this case is that the purchaser alleged a right to rescind because the development was completed early.
Associate Chief Justice Cullen attempted to reconcile the previous case law and concluded that an incorrect estimated completion date does not, without more, provide the purchaser with a right to rescind the purchase agreement. Rather, he held that the “key concept, however, is materiality which, in the context of REDMA, is a function of the value, price and use of the condominium. Delay manifestly affects those criteria and would be in the mind of a reasonable person as such; acceleration is qualitatively different than delay and would not similarly influence the mind of a reasonable person.”
At the end of the day, Bosa stands for the concept that each time an estimated completion date is found to be an inaccurate, the court will need to consider whether the inaccuracy was “material”. In doing so, the court will need to consider whether the delay has affected the “value, price and use” of the condominium. Accordingly, a purchaser looking at his or her options will not be able to simply point to a missed completion date and say it is “material”. Instead, evidence will need to be led concerning how the “value, price and use” were affected in the particular circumstance of the case. Bosa represents a tougher road ahead for would be defaulting purchasers.
Craig is one of British Columbia’s most accomplished litigation lawyers and acts for clients in commercial and business disputes. His particular areas of focus include shareholder remedies, trust, pension and fiduciary ...
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