Richmond buyers sue a developer for cancelling presale contracts and win
At a glance (2 minute read)
- Buyers of Richmond condominiums had their presale contracts cancelled and sued the developer, Anderson Square Holdings Ltd., winning $13.1 million in damages.
- BC Supreme Court Judge Kevin Loo ruled that the developer acted dishonestly in cancelling the contracts, falsely claiming a lawsuit and lack of financing made the project unviable.
- The project was completed and rebranded two years later, with units sold at higher prices, leading to the damages awarded being the difference between the original purchase prices and the units' value in 2021.
When buyers of condominiums had their presale contracts cancelled and their units sold for higher prices, they sued Richmond developer Anderson Square Holdings Ltd. and won.
BC Supreme Court Judge Kevin Loo has ordered Anderson Holdings to pay $13.1 million to the 31 condominium buyers of the Alfa project after concluding the developer wasn’t entitled to cancel the contracts.
The history
The story began when the buyers signed presale contracts in 2015 and 2016.
On July 12, 2019, the buyers received notices from the developer terminating their contracts and stating the buyers could get back their deposits with interest.
The developers claimed a lawsuit by a construction company and their inability to obtain financing made the project unviable.
Two years after the developers sent the termination notices, they rebranded the project as Prima and completed it. The units were offered for sale at higher prices to other buyers.
Presale buyers sue and win
The presale buyers sued Anderson Square Holdings Ltd.
In his decision, Justice Loo found the developers had acted dishonestly when they claimed a lawsuit initiated by the construction company and a lack of financing had made the project impossible.
Justice Loo noted the construction company continued working on the project and financing by Hong Kong lenders continued.
Justice Loo raised doubts about reliability and credibility of the developers, stating in his decision:
“Further, I find that the Personal Defendants knew that the reasons they gave in the Termination Notices in support of their reliance on Clause 21 were false or misleading, or that they were reckless as to whether this was so.”
Justice Loo calculated the damages as “the difference between the purchase price agreed to in that plaintiff’s individual contract and the value of that plaintiff’s presale unit in August 2021.”
The pre-sale buyers were awarded damages totalling $13,093,900.