The signing of the preliminary contract by the buyer and developer represents the first step in the sale of a condominium unit. Essentially, it’s a contract in which the buyer agrees to buy, and the developer agrees to sell, the property under the conditions set out in the contract.
Although the construction of a residential condominium project can involve a number of uncertainties, compliance with the conditions set out in the preliminary contract is essential. In fact, if a developer delivers a condominium unit with less living space or ceiling height than advertised, or modifies the location of common facilities after the preliminary contract has been signed, he could be exposed to legal action by disgruntled buyers.
Indeed, the Civil Code of Quebec states that “every person has a duty to honor the commitments he has entered into”[1]. More specifically with regard to the notion of surface area, the Civil Code of Québec provides that “when the seller is bound to deliver the capacity or quantity indicated in the contract and is unable to do so, the buyer may obtain a reduction in the price or, if the difference causes him serious prejudice, the resolution of the sale”[2].
Relying on these provisions, the Superior Court, in Duval v. Habitats District Griffin Îlot 10 inc.[3], ordered the developer to pay the buyer $73,000.00 as a reduction in the sale price, after the latter had discovered that the net surface area of his condominium unit was less (by approximately 12%) than that indicated in the preliminary contract. The Court of Appeal recently confirmed this judgment, adding that the buyer had not tacitly waived his rights and recourses by signing the deed of sale.
In the 6169970 Canada inc. c. Lesage[4]In this case, the Court of Appeal reiterated the importance of developers of condominium projects respecting the terms and conditions of announced plans with respect to buyers. In this case, the Court upheld the trial judgment, which had ordered the developer to reimburse the buyer’s deposits totalling $84,845.64. The buyer had refused to complete the sale after learning that amenities, such as a training room, would not be built in his building after all, and that the ceiling height of his private unit was lower than that announced in the preliminary contract.
Finally, in the Labelle v. Liguori inc. [5], the Cour du Québec ordered the developer to pay the plaintiff $15,000.00 in compensation for loss of use of her condominium unit. After the sale was completed, the plaintiff realized that common facilities, namely the building’s gymnasium and swimming pool, had been built in front of her unit, causing her more inconvenience than she had anticipated. Considering that the location of these facilities differed from what had been agreed on the plans at the time of the plaintiff’s reservation of the condominium unit, the Court ruled that the developer had failed in its obligations and had to compensate the plaintiff for the damage suffered.
[1] 1458 al. 1 C.c.Q.;
[2] 1737 al. 1 C.c.Q;
[3] Duval v. Habitats District Griffin Îlot 10 inc, 2018 QCCS 4703;
[4] 6169970 Canada inc. v. Lesage 2019 QCCA 1867;
[5] Labelle v. Liguori inc, 2016 QCCQ 9244.