Legal Blog: Real Estate

Part Performance

273 Ontario v. 238 Ontario 2025 Ont CA

The vendor sought to enforce an oral land‑sale agreement and had taken extensive steps toward closing, including preparing documents and tendering funds; the purchaser refused to close despite participating in the closing process. The trial judge found that part performance rendered the oral agreement enforceable, notwithstanding the Statute of Frauds. The Court of Appeal agreed that the vendor’s extensive closing activities amounted to detrimental reliance, satisfying both the evidentiary and equitable components of part performance.

Stay of Order

Kakoutis v. BNS 2026 Ont CA

Mortgagors sought a stay of an eviction order pending a proposed appeal to the Supreme Court of Canada, following years of unsuccessful attempts to relitigate mortgage default issues. Mortgagors argued personal hardship and challenged the mortgagee’s enforcement steps while the mortgagee brought a cross‑motion to restrict further motions.  The motion judge denied the stay, holding that there was no serious issue and no irreparable harm, and that the balance of convenience favoured the mortgagee. The judge rejected the cross‑motion, finding that the mortgagors’ conduct had not yet reached the level of frivolous or vexatious abuse.

Mortgage Enforcement

TD Bank v. Andrade 2025 Ont SCJ

Mortgagee moved for possession of mortgaged property. The occupant claimed that he was an owner; the titled owner claimed that the occupant was a squatter with no title. The judge ignored the dispute because the occupant had not paid the mortgage payments or condo fees and, even if he were a beneficial owner, he was obliged to do so. Further, the fact that the occupant claimed, without commencing an action, that the mortgagee knowingly assisted the titled owner was not a reason to disallow the mortgagee to realise on its security.

House Inspection

Miller Desjardins v JF Lajoie Construction Inc. 2025 Ont SCJ

A house inspector missed obvious patent defects, resulting in the purchasers having problematic foundation, roof, and some windows and doors. The judge held that there was no breach of contract because the purchasers’ real estate agent retained the inspector and paid his $425 fee. Although we do not agree with this finding, it does not matter; the judge held that the inspector breached his duty of care in tort to the purchasers and awarded damages of approximately $68,000.

Breach of Contract (Real Estate)

Major Weston Homes Ltd v. Li 2025 Ont SCJ

Developer’s standard form agreement included a clause that stated that the purchaser had to retain a lawyer at least 30 days before closing and, if the purchaser did not, the purchaser waived tender and was in breach of the contract. The judge enforced this provision and held that the purchaser was in breach of contract. The judge refused to allow interest on the damages at 20% per year, even though it was set out in the agreement. The judge relied on a previous decision that stated that a “surprisingly onerous interest rate” had to be brought to the purchaser’s attention.

Damages (Real Estate)

Baldwin v. Williams 2025 Ont SCJ

Purchasers breached an agreement of purchase and sale because they could not get financing after the property had fallen in value. The vendors resold the property for a loss. The court noted that the duty to mitigate only requires the plaintiff to take reasonable steps, not all possible steps, to reduce its loss. The court ordered damages for the difference in the two sale prices and extra costs that the vendor’s incurred as a result of owning the property from the date of the original closing to the date of the final closing of the resale.

Encroachment

Bachli v. McLeod 2025 Ont SCJ

Defendant’s retaining wall encroached on his neighbour’s property. Predecessors in title had entered into an encroachment agreement that allowed the encroachment for 21 years. The agreement had expired and the new neighbour wanted the encroachment gone. The court noted that the parties had not negotiated an extension or a new agreement and granted a declaration that the retaining wall was encroaching on the neighbour’s land.

Lawyer and Non-Client

Furney v. Hazan and Chhina 2025 Ont CA

Plaintiffs claimed that a mortgage broker improperly instructed its lawyer to register a collateral mortgage without plaintiffs’ consent and that the lawyer registered the collateral mortgage to block plaintiffs’ mortgage financing and was involved in the improper removal of funds from his trust account. Plaintiffs also alleged that another entity, other than the lender, was somehow involved. The Court of Appeal dismissed the action against the other entity because it was not the lender and plaintiffs pleaded nothing to demonstrate its involvement. The Court allowed the action against the lawyer to continue, even though the lawyer was not plaintiffs’ lawyer, because plaintiffs had alleged that lawyer had participated in a fraud and merely following his client’s instructions did not insulate him from liability.

Mistake

Espartel Investments Limited v. MTCC 993 2024 Ont CA

Condo corporation had been paying inflated invoices relating to shared electricity since 2006. Its consultant caught the invoicing mistake in 2017 after the condo had paid $730,000 too much. The defendant argued that the condo should have caught the overcharge earlier such that most of it was statute barred. The trial judge held that it was not actually apparent and that a reasonable defendant would not have caught the mistake. The Court of Appeal upheld the decision. The court noted that the fact that the errors were capable of being discovered did not necessarily start the limitations clock. The test is reasonable discoverability, not the mere possibility of discovery. The court ordered the return of the funds, based on unjust enrichment.

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Honest Performance Breach

Bhatnager v. Cresco Labs Inc. 2023 Ont CA

The vendor claimed that the purchaser ought to have informed the vendor of an after-closing occurrence that would have affected the vendor’s entitlement to a post-closing adjustment. Motion judge agreed, but held that purchaser suffered no damages because the evidence showed that, knowing about the problem or not, the purchaser could have done nothing about it. The Court of Appeal dismissed the appeal and stated that a breach of a duty of honest performance (per the SCC in Callow) does not presume a claimant’s damages; the claimant must still prove that there was a lost opportunity that had monetary adverse effects. The Court also held that, on the evidence, that there actually was no breach – because the vendor had told the purchaser of the problem on a timely basis.