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Unilateral move by builder of furnace to hall closet of condominium unit allowed purchaser to terminate transaction, Spring 2008

Mr. and Mrs. B agreed to purchase a condominium unit from Independence Way from plans. At the time, they were given a plan showing a sliding door separating the powder room from a room marked W/D and F.H.W. This room was to contain a stacked washer and dryer (W/D) and a hot water heater with the unit’s furnace stacked on top (F.H.W.).

Mr. Brooker testified that the front hall closet was rendered useless by the placement of the furnace in one-half of the closet and by bringing forward the rear wall of the closet to within six inches of the closet doors.”

During construction of the unit, the furnace was moved into the front hall closet. The B’s were not told of this change, only to discover same at the pre-delivery inspection. They spent the next seven weeks attempting to persuade the builder something had to be done about the closet, but the builder put them off and, basically, refused to discuss the matter.

The Bs tried to rescind the Agreement of Purchase and Sale, and eventually commenced an action in Small Claims Court, where the Trial Judge found against them.

On appeal, the Court determined that the question was “did the change in the location of the furnace constitute a fundamental change to the Agreement of Purchase and Sale?”

The Appeal Court reviewed the decision of Danko v. 792207 Ontario Ltd. (c.o.b. Marbrook Homes), [2004] O.J. No. 1542 (C.A.) wherein the purchasers contracted to receive a cathedral ceiling over the family room, but did not. The Ontario Court of Appeal held there was evidence which subjectively and objectively supported a finding that the cathedral ceiling was a crucial feature of the home, and the purchasers were entitled to the return of their deposit.

Similarly, in Kingsgate Homes Ltd. v. Goliszek, [2001] O.J. No. 1258 (C.A.) the Ontario Court of Appeal found that the move of a detached garage from the side of a house to the front was a fundamental change.
ADVANCE \d6At trial, Mr. B had testified that in attempting to solve his problems he obtained permission to try and sell the unit, and that two prospective purchasers immediately lost interest when they inspected the front hall closet and noted its configuration. 

“[T]he acknowledgement contained in the Agreement of Purchase and Sale that the location of the furnace is to be determined by the architect, may not be located as shown on the brochure and [the Purchaser(s)] shall be deemed to accept any such change, can not be construed as unlimited and does not apply to fundamental changes.” [

The Appellant Court went on to find that, on the subjective and objective evidence, the changed furnace location constitutes a fundamental change. The Court further found that the acknowledgement contained in the Agreement of Purchase and Sale that the location of the furnace is to be determined by the architect, may not be located as shown on the brochure and the B’s shall be deemed to accept any such change, can not be construed as unlimited and does not apply to fundamental changes. 

Brooker v. Independence Way Inc., [2007] O.J. 4692, Ont. Div. Ct.