If a buyer enters into a real estate deal with the intention of developing the land, there can be serious consequences if the seller does not honour its side of the bargain.
In our article on WED Investments Limited v. Showcase Woodycrest Inc., the situation was explained. In that case, a land purchase transaction fell through, and the seller was held to be liable. In the result, the court awarded $3.2 million in damages to the buyer, which was the land’s increased value, as calculated between the time of the purchase agreement and the closing date.
In a more recent decision, however, a seller in similar circumstances was ordered to pay a buyer over $11 million in damages, representing the amount of profit that the buyer may have reaped had it been able to purchase and develop the lands.
In The Rousseau Group v. 2528061 Ontario Inc. two parties entered into an agreement for a property sale in January 2017. The property was 45-acres with natural heritage features and was situated in a developing community that was expanding at the time. The buyer intended to undergo a large residential development on the land and the agreement specifically stated that the land was being purchased for development.
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