Buyers Were Too Late in Objecting to Environmental Certificate of Property Use

The facts in Country Wide Homes v. Cui involved the buyers’ aborted purchase of a luxury home in a newly-established neighborhood. They had agreed to pay about $3,780,000, but then failed to close, prompting the builder to sue them for its damages.

In response to that legal claim, the buyers asserted they were unsophisticated in real estate, and that the builder’s representative pressured them. They also argued that they were prejudiced by a language barrier, and did not truly review or understand the agreement they signed.

The court dismissed these excuses out-of-hand, concluding that “none of these contentions are credible.” The buyers were not new to the real estate market, as this was their fourth Ontario property. They understood English and were presented with the offer by their own Mandarin-speaking real estate agent, who explained the offer clause-by-clause. They did not take advantage of the agreement’s 5-day ‘cooling off’ period and waived the chance to get independent legal advice.

The buyers’ next line of argument – also unsuccessful – had to do with the Environmental Certificate of Property Use (CPU) issued by the Ministry of the Environment (MOE), as required under the provincial Environmental Protection Act. They claimed that when they signed the agreement, they were unaware of the CPU’s existence and significance, and it was not properly disclosed to them. They accused the builder of misrepresenting the quality of the property, especially in connection with certain environmental issues such as tainted groundwater that could limit their use of the land.

After noting the stark similarity to another recent ruling involving the same builder (Country Wide Homes Upper Thornhill Estates Inc. v. Ge, 2020 ONCA 400) the court rejected the buyers’ excuse for failing to close. The agreement itself contained a prominent clause, required by the MOE that warned about the groundwater in the subdivision and advised of the remediation efforts on the land within the development.  Plus, every page of the agreement also contained a notice, in all capital letters, advising that the written agreement was what governed the parties’ relationship, and that oral representations were precluded. With the assistance of their own agent, the buyers had initialed each of the pages containing the MOE warning. In these circumstances, there had been no misrepresentation.

Tellingly, in the months after signing, the buyers never complained or asked for more disclosure on environmental issues; to the contrary they ordered over $160,000 in special changes to construction (including a custom-made kitchen, an elevator and a built-in wet bar). They gave no indication they had concerns that might prompt them not to close.

The court then turned to assessing the damages. After the sale failed to close, the builder tried to re-sell, but the buyers’ built-in specifications made this more difficult. The early-March 2020 timing was also inopportune, as it was the start of the COVID-19 pandemic. The home had lost considerable value by the time it eventually sold for $3,100,000 in July of 2020. This was $480,000 less than the buyers had agreed to pay.

The builder was awarded $584,000, which included certain expenses; however the court declined to award another $280,000 in interest, since the builder provided neither detailed calculations nor proof it had paid this amount. See: Country Wide Homes v. Cui, 2021 ONSC 4724.

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