Residential Real Estate Deal Gone Wrong at Former Canadian Trump Hotel


By Written on behalf of Campbell Bader LLP

The Ontario Court of Appeal recently decided a case about a residential real estate deal, centred on issues of rescission and receivership, involving a former Trump International Hotel.

What Happened?

The buyer purchased a residential unit in the former Trump International Hotel by agreement of purchase and sale (“the agreement”) with the seller dated November 20, 2006, and took interim occupancy in July 2012. 

The purchase price was $1,392,000, with a required deposit of $278,400.

On December 20, 2012, the seller set a unit transfer date of February 7, 2013. On February 5, 2013, the buyer claimed the agreement was not binding because the seller had failed to deliver a current disclosure statement. In the alternative, he provided a notice of rescission pursuant to s. 74(7) the Condominium Act (“the Act”) because there were material changes that the seller had failed to disclose. 

The alleged material changes included the fact that the Trump International Hotel would have only 60 stories instead of 70 and would not be connected to the PATH (a network of underground walkways in downtown Toronto). 

The seller responded by bringing an application under s. 74(8) for a determination of whether the changes were material. 

The buyer then issued and served a statement of claim, alleging he was entitled to rescind the agreement and have his deposit returned because of the material changes. 

The seller defended and counterclaimed, alleging that the buyer breached the agreement and forfeited the deposit.


However, on November 1, 2016, a receiver was appointed after the seller had run into financial difficulty.

The receiver conveyed the residential unit to the seller’s main creditor. When the stay of proceedings expired, the buyer moved for summary judgment for the return of his deposit plus interest.

Lower Court Decision

The motion judge explained that “[o]n February 5, 2013 [the buyer] sent [the seller] a notice of rescission demanding a current disclosure statement and seeking the return of his deposit based on material changes in the disclosure.” She found the seller had no obligation to close the sale of the residential unit while he was asserting his right of rescission under the Act. The assertion of a right of rescission did not amount to a breach of contract.

In addition, the motion judge found that the agreement for purchase and sale of the residential unit was repudiated through no fault of the buyer when the receiver sold the unit to a third-party creditor. 

As a result, the motion judge granted summary judgement on the basis that the agreement stated the deposit would be returned with interest should the agreement be terminated “through no fault of the [p]urchaser”. 

Court of Appeal Decision

The court rejected the many arguments raised by the seller on appeal and concluded:

“The motion judge’s finding that the agreement was terminated as a consequence of the receivership, and not through any fault of [the buyer], was amply supported by the record. There is no basis for interfering with that finding. I would therefore dismiss the appeal from her judgment ordering the return of the deposit plus interest for the residential unit.”

Get Advice

Buying or selling a piece of property is likely the biggest financial transaction you will make in your life. Skyrocketing real estate prices can make what is an already stressful process even more stressful. In today’s market, buyers and sellers may be tempted to forego consulting with a lawyer to save some money. However, a real estate transaction should never be undertaken without the advice of a knowledgeable real estate lawyer who regularly handles such matters.

Whether you are buying your first home, purchasing a cottage or investment property, or selling your home to downsize to a condo, the real estate lawyers at Campbell Bader LLP can guide you through every step of your residential real estate transaction. We will explain your options, review all relevant paperwork and contracts, negotiate on your behalf, and defend your interests in any potential disputes that may arise.

At Campbell Bader LLP, we understand that that the majority of real estate transactions occur in the evenings or on weekends. One of our lawyers would be happy to meet with you, by appointment, at a time and date that works best with your schedule. To learn more about how we can make the buying and selling process less stressful, contact us online or at 905-828-2247. We look forward to speaking with you.


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