9 Mar 2023
Dhaliwal v. Midland Homes
In the case of Dhaliwal v. Midland Homes dated March 9, 2023, the aftermath of a legal hearing saw the issuance of an order under the Vendors and Purchasers Act, R.S.O. 1990, c. V-2, and the subsequent explanation was provided as follows. The matter had revolved around a purchaser's application under s.3 of the Act, addressing concerns related to a real estate purchase and sale agreement.
At the heart of the dispute had been the "Added Cost Adjustment" outlined in the contract's paragraph 3(g), which pertained to covering unforeseen increased expenses due to modifications in building codes or governmental obligations. The respondent, having invoked this clause, aimed to raise the purchase price by $152,640.00 due to COVID-19 related construction cost escalations. The applicants had been presented with a choice: to accept the increase or to terminate the agreement and receive their deposits back.
Upon review, it had been established that the added costs were primarily incurred due to supply issues related to the pandemic, rather than direct changes in building codes or regulations. The judge had determined that the contractual clause had not been intended to cover such indirect cost increases. Furthermore, the interpretation of the contract had been supported by the Tarion warranty, which had excluded the adjustment in question. Consequently, the applicants' requested order had been granted, declaring that the respondents had not been entitled to the contested adjustment during the closing of the agreement.