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ARTICLE · 07 MARCH 2025

How Not To Exercise An Option To Purchase Land

Blaney McMurtry LLP
Blaney McMurtry LLP
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The recent Court of Appeal decision in 1785192 Ontario Inc. and 1043303 Ontario Ltd. v. Ontario H Limited Partnership provides useful guidance on the rules around the exercise of options to purchase land where the price...

CanadaReal Estate and Construction
Irvin Schein
Irvin Schein
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The recent Court of Appeal decision in 1785192 Ontario Inc. and 1043303 Ontario Ltd. v. Ontario H Limited Partnership provides useful guidance on the rules around the exercise of options to purchase land where the price to be paid is to be set in accordance with appraisal evidence.

In this case, a tenant under a pair of commercial leases wished to purchase the properties that it occupied. Each lease contained an option to purchase which provided that the purchase price would be the midpoint of appraisals to be obtained by each party.

The parties each obtained an appraisal. They were far apart. The tenant's appraiser suggested a value of $11,746,000. The landlord's appraiser put the value at $31,200,000. The midpoint, therefore, was $21,473,000.

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