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In a recent Ontario case, a court awarded damages to purchasers for a failed real estate transaction of a home they claimed to be unique. 

Sellers Renege on Sale of “Unique” Home 

The purchasers entered into an agreement of purchase and sale to buy the sellers’ property on June 28, 2016. The purchase price was $940,000. The agreement was to close on September 28, 2016. 

However, on September 7, 2016, the sellers breached the agreement by rescinding it and the deposit was returned.

Following this, the purchasers had their real estate agent look for another home. However, the real estate agent found that there were no properties available that could be considered a suitable substitute, at the price range of $940,000 to $950,000, having the characteristics similar to the characteristics of the original property.  

As a result, the purchasers were forced to pay $5,000 more for a home that did not have many of the attributes of the property that they had originally wanted to buy from the sellers. For instance, the home they purchased did not have a finished basement, was around 400 square feet smaller and on a lot that was nearly 44% smaller. The purchase of the new home was completed on December 20, 2016 for the price of $945,000.

The purchasers sued the sellers seeking specific performance or, alternatively, damages. They claimed that the sellers’ property was unique and had more attractive attributes than the home they eventually purchased. Additionally, following an appraisal of both properties, the purchasers claimed additional damages of $160,000 for the amount that the original property had increased in value over the increase in value of the property they ended up buying. 

Court Finds that Property Was Unique

The court began by reviewing the purchasers’ claim that the property they had attempted to buy was unique to them. The purchasers claimed they had wanted to buy that property for the following reasons: 

•         It was in the area they wanted;

•         It was close to a religious temple;

•         It was close to a school;

•         It was close to the golf course;

•         It was close to a highway;

•         It had 4 bedrooms;

•         It had a finished basement; and

•         It had a large lot size. 

The court observed that, while none of the listed characteristics were unique by themselves, when such characteristics were considered together with the sole availability of a property with such characteristics during a “hot” and rising market, the property was in fact unique. The court further recognized that there had been no other property, including the one they eventually bought, that met the purchasers’ “wish list”. The court observed that the purchasers had been forced to settle in purchasing their home, particularly given their budget, the fast rising prices in the area and the lack of availability of another home with similar characteristics.

The court then noted that the sellers had not presented any evidence that their property was not unique or that there were other comparable substitute properties available at the time. 

The court concluded as follows:

“Uniqueness must take into account all the surrounding circumstances, including the purchaser’s “wish list”, the market conditions, the location, the type of home, the condition of the home, the lot, the finished areas of the home, the quality of finishes, the availability of comparable homes with the same attributes in the same price range, the proximity to certain amenities and so on.  

The [sellers] chose not to lead any evidence on any of these issues. 

On the record before me the only conclusion I can reach is that the Property was unique.”

As a result, the court awarded $150,000 in damages to the purchasers.

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