Court rules man can rescind purchase of $3.5 million condo at UBC
By NEAL HALL , Vancouver Sun
VANCOUVER - A Richmond man who bought a new $3.5-million condominium at the University of B.C. can rescind the purchase contract because he was not fully informed about changes to the development, a judge has ruled.
Timothy Dwane and his wife Teresa became interested in the fall of 2007 in moving from their Richmond home to a condominium in a new development at UBC called Coast.
After several visits to the presentation centre and discussions with real estate agent Ivy Wu of MAC Real Estate Corp., on May 10 last year they put down a $350,000 deposit on a $3.5-million terrace, which had about 2,000 square feet of living space and another 2,000 square feet of terrace.
It was supposed to offer expansive views and privacy. But on Oct. 27 last year, when the couple had access for the first time to the partially completed unit, they were disappointed by the actual view from the unit and its terrace, the privacy and noticed a wine storage room that had been promised was missing.
The couple later learned they never received the amendments to the original disclosure statement to the project. The amendments changed the development to 45 condominiums, rather than the previous 35, deleted the "wine storage room" and increased the density of the development.
Dwane sued the developer, Bastion Coast Homes Ltd. and Coast Development Partnership, alleging false representations were made prior to his purchase.
He sought to rescind his purchase contract and get his deposit back. The developer filed a statement of defence, saying if there were misrepresentations, Dwane is barred from relying on them by the terms of the contract.
The developer also issued a third-party notice against MAC, alleging the company was retained to provide real estate marketing services and if Dwane was successful in rescinding the contract, then MAC breached its duty of care.
The developer claimed it provided all amendments to MAC, which was instructed to provide all interested parties with copies of the amendments prior to prospective purchasers entering into purchase contracts.
MAC, in its statement of defence, specifically denied receiving any instruction from Bastion Coast Homes about providing purchasers with copies of the amendments.
B.C. Supreme Court Justice Lynn Smith found that Dwane was entitled to rescind the contract under the Real Estate Development Marketing Act, which requires that purchasers receive all amendments to the disclosure statement.
The judge found Dwane did not receive three amendments. "If a disclosure statement has already been amended by the time a purchaser signs a contract, the purchaser should know that fact and know what the amendments are, for the simple reason that the purchaser is entitled to know what it is that he or she is purchasing," the judge said in written reasons released this week. "It is also consistent with that objective to provide a remedy for purchasers, in the form of a right of rescission, where developers have failed to meet their disclosure obligations," the judge concluded.
The decision could have implications for hundreds of buyers who purchased condos, only to find their value had fallen in the current real estate market, so they failed to complete their purchase and now are being sued by developers.
nhall@vancouversun.com
The full judgment is available online: http://www.courts.gov.bc.ca/jdb-txt/SC/09/07/2009BCSC0726.htm
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