Purchaser’s inability to obtain funds not changing nature of Agreement of Purchase and Sale

Real Property - Sale of Land - Remedies

Defendant agreed to purchase property built by plaintiff vendor for amount of $819,990. Agreement of purchase and sale (APS) required purchaser to pay five deposits. Purchaser paid four deposits totaling $45,000 but defaulted on fifth deposit. Purchaser sought to assign APS but refused to pay fees claimed by vendor for assignment. Purchaser failed to cure default or close transaction. Vendor advised that APS was terminated and that deposits were forfeited. Vendor later sold home for amount of $715,000. Vendor commenced action against purchaser for amount of $82,059.50, representing total loss of $127,059.50 less deposit of $45.000. Vendor brought motion for summary judgment. Motion granted. Purchaser’s inability to obtain mortgage funds for purchase did not change nature of APS. Purchaser defaulted because of inability to borrow sufficient amount to close deal. Purchaser could not assign APS unless vendor consented. Vendor could have refused to permit assignment but reasonably agreed to assignment on payment of reasonable fees. There was no frustration of APS. Vendor was awarded damages in amount of $82,059.50.

Paradise Homes North West Inc. v. Sidhu (2019), 2019 CarswellOnt 3440, 2019 ONSC 1600, C.J. Brown J. (Ont. S.C.J.).

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