March 21st - 2014

Legal Beat: Seller’s remorse occurs after rumours of demolition

The house owner in this case sold her property for $1.7 million and then changed her mind. Her major complaint was that she learned that the buyer might demolish the house.

Mervin Burgard Q.C.

The house owner in this case sold her property for $1.7 million and then changed her mind. Her major complaint was that she learned that the buyer might demolish the house. The Agreement of Purchase and Sale did not contain any conditions to prevent demolition.

The seller’s position is noted in parts of an email: “As I have now heard from four very reliable sources that my parents’ home is slated for demolition by you, I want it verified from you, whether you did in fact change [your] mind, or was that your intention all along?  That would change the whole deal. I did not sign on for demolition. Why, that might shred my very soul after 56 years. You and your agents promised right to my face on my property that only some renovation would occur and your big family would live in it happily for many years. That is what I’ve been telling my neighbours.”

“The buyers cannot do as they want. That would be buying under false pretences. I sold under duress and the undue influence of [the registrant]. I explicitly stated that I either wanted the house moved or lived in. The [buyers said they were] going to renovate a little then live a long time in it. That was the basis on which I chose them to be recipients. There was a verbal understanding. Why then was the surveyor checking out the front of the property that I understood they weren’t touching at all? I could not handle the house being knocked down. That is a DEAL BREAKER. People say walk away. I could physically. I could say it doesn’t matter. But if home, and family, and the environment don’t matter, what does? Would I be rootless, soulless, nowhere?”

Although the seller later promised to sign a mutual release form, “sans reference to my real estate agency”, she never did sign a release and made it clear that she would not complete the transaction. The deal collapsed, and she refused to release the deposit. After hearing all evidence, the judge ordered the seller to return the deposit. 

Kirshenblatt v Kriss 2012 ONSC 6858

MERV’S  COMMENTS

Mervin Burgard Q.C.

An anticipatory breach occurs where one party to a contract repudiates the contract before performance is due. Since the seller repudiated the agreement, the buyer was entitled to the return of the deposit, and costs of $8,500.

There’s more to the story. The seller “referred to various parties, including her real estate representative and a bank, as ‘the pirate crew’ and the buyer as the ‘pirate captain’, implying that he was involved as leader of the conspiracy.”  She later resold the house at a price $190,000 higher. However, I don’t think that the judge was impressed with the seller’s remorse.

Mervin Burgard, Q.C.

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