This article discusses the case of Trivedi v. 2607305 Ontario Inc., 2025 ONSC 72. Here, the applicant entered into an agreement to purchase a penthouse condo unit from Urbane in Niagara Falls, Ontario. The agreement was signed on March 16, 2022.
When purchasing a condo unit, it is mandatory for the Declarant to provide a disclosure package to all buyers at the time of signing the agreement. This package includes the condo's declaration, bylaws, rules, and details on proposed amenities and project layout. Buyers have a 10-day period, known as the "cooling off period," to review these documents and can walk away from the purchase if unsatisfied.
Where there is a material change in information, the Declarant is required to deliver a revised disclosure statement. On Feb 22, 2024, Urbane (the "Declarant") delivered a revised disclosure statement to the applicant which revealed, among other things, that a floor would be added above the applicant's unit.
The issuance of a revised disclosure statement opens up a further 10 day rescission period in cases where a material change is found to exist.
Purchasing decisions are subjective. The test for what constitutes a material change is:
"Would a reasonable purchaser regard the change or amendment as sufficiently important to his or her decision to purchase that, had the disclosure statement contained the new or amended information at the time it was delivered, the purchaser would not likely have gone ahead with the transaction, but would have rescinded the agreement?"
The applicants in this case argued that they agreed to the purchase because they desired to live on the top floor and paid a higher premium for this unit. The judge concurred that adding a floor above constituted a material change.
It is a requirement under the Condo Act that, to successfully rescind an agreement, the buyer must make the application within the 10 day window of receiving the revised disclosure statement or becoming aware of a material change in the event that the declarant does not issue a revised disclosure statement. The buyer must further make an application to the Superior Court of Justice within this 10 day window for a determination by the court that the change is material.
Here, the applicant requested clarification from the Declarant's team almost one month later. This exchange continued for a few months and in June, 2024, the applicant's counsel recommended rescission of the Agreement. On June 12, 2024, the applicant commenced an application for rescission on the basis that the addition of the floor constitutes a material change.
The court found that, even though the addition of the floor constituted a material change, the applicant was beyond the 10-day window when attempting to rescind the agreement. Consequently, the applicant did not have the right to terminate the agreement.
The court ordered the applicants to pay the Declarant's costs, fixed at $25,000. This case underscores the importance of adhering to rescission timelines, as incorrect applications can be costly.
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