Anyone who has been involved in a transaction for a property under construction is likely familiar with the potential for delays of completion. While developers don’t often fail to deliver, it can happen. What happens when significant delays do occur? Can a developer be in default under the contract? What about the innocent party in a transaction: can they fail to deliver on their obligations after the other party has already defaulted? While the answer isn’t always simple, it comes down to enforcing your rights, or losing them.
A recent decision out of the Ontario Court of Appeal has confirmed that an innocent party to a real estate transaction must enforce their rights when the defaulting party repudiates a real estate contract, otherwise they can lose their right to terminate the contract or seek other remedies.
Repudiation of a contract occurs when a party defaults on their obligation(s) under a contract and demonstrates “an intimation of an intention to abandon and altogether refuse performance of a contract”[i]. Some examples of repudiation in real estate contracts are as follows:
failure of the buyer to pay the deposit when due and payable;
failure of a buyer to complete a purchase on the completion date;
failure of a seller to transfer a property to a buyer on the completion date; or
the buyer (or its representative) communicating to the seller that they cannot, or will not, complete the purchase of the property.
Once a contract has been repudiated, the innocent party has two options:
accept the repudiation, and seek remedies against the defaulting party; or
elect not to terminate, and the contract remains in force.
Under the second option both parties are obligated to continue performing their obligations under the contract.
In Ching v. Pier 27 Toronto Inc.[ii] the Ontario Court of Appeal denied the buyer’s request for the return of their deposit, even though the seller was in default under the contract. The reason the court denied their request was because the buyers had failed to accept the repudiation by the seller and then the buyer ultimately failed to perform their obligations under the contract. The facts of the case are as follows:
The buyers, Mr. and Ms. Ching, entered into a presale contract in 2008 to purchase a condo that was under construction
The Ching’s paid deposits totalling $214,238.85
The original completion date was set to occur in 2010
The developer extended the completion date eight times between 2010 and 2014
The presale contract only allowed the developer to extend the completion date by 24 months from the original completion date, meaning the developer was in default.
The buyers never actively enforced their rights with respect to the contract every time the developer extended the completion date, meaning they acted is if the contract was still in effect
In August of 2014 the buyers finally requested the termination of the contract due to the developer’s numerous unpermitted extensions
The developer stated they did not have the right to terminate the contract
The buyers did not close the transaction nor take possession of the property at closing because their mortgage approval had expired and they believed they should be entitled to the return of their deposit due to the developer’s ongoing default in extending the completion date.
The trial judge in this case decided that while in fact the developer was in default under the contract, the Ching’s had failed to “‘clearly and unequivocally’ accept the repudiation to terminate the Agreement“[iii] when the developer was in default, and they were therefore bound to also perform their obligation under the contract to complete the purchase.
The trial judge treated the presale contract as subsisting because after each event of default by the developer (ie. each unpermitted extension), the buyers acted in a way that affirmed the contract was subsisting, these actions included requesting the ability to assign the contract and doing “nothing for too long”[i]. Based on this, the trial judge denied the return of the buyer’s deposit. The Court of Appeal upheld the trial judge’s decision and refused the Ching’s request for the appeal of the original judgement and to have their deposit returned.
Conclusion
It is important for Realtors to advise clients to seek independent legal advice if one party to a contract is in default. This advice should be sought as soon as they become aware of the default as simple actions may be inferred that the innocent party elected not to terminate the contract or seek other remedies.
[i]Freeth v. Burr, (1874) 9 L.R.C.P 208, from Donald M McRae, Repudiation of Contracts in Canadian Law, 1978 56-2 Canadian Bar Review 233, 1978 CanLIIDocs 22
[ii]Ching v. Pier 27 Toronto Inc., 2021 ONCA 551 (CanLII)
[iii] See paragraph 27 of Ching v. Pier 27 Toronto Inc., 2021 ONCA 551 (CanLII)
[iiii] See paragraph 49 of Ching v. Pier 27 Toronto Inc., 2021 ONCA 551 (CanLII)
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MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
