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ARTICLE · 22 SEPTEMBER 2016

Real Estate Developers Not Responsible For Market Declines, B.C. Court Rules

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In the late 1990s, the value of 89 units in Vancouver's Westin Grand Hotel collectively decreased in value from C$18-million to C$10-million in two and a half years.

CanadaReal Estate and Construction
Roy Millen
Roy Millen
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Remember when Vancouver real estate went down? In the late 1990s, the value of 89 units in Vancouver's Westin Grand Hotel collectively decreased in value from C$18-million to C$10-million in two and a half years. Investors in the units then discovered that the developers' disclosure statement had materially misrepresented occupancy projections, and brought a class action against the developers. Yet, in its September 15, 2016, decision, The Owners, Strata Plan LMS 3851 v. Homer Street Development Limited Partnership, the B.C. Court of Appeal dismissed the investors' claim, because their loss had resulted from a general market decline, not the misrepresentation. The moral? Real estate developers are not responsible for market forces that impact unit values.

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