Contractual Terms in Real Estate Development

Did you know you could lose the market value of your home due to obstructed views and loss of privacy if you do not contractually stipulate against it?

When you purchase a property, how the contract of purchase and sale is drafted is essential. If specific clauses are not included, then recovery of damages in court is most likely out of the question. 

This was what happened in a recent case by the BC Supreme Court, Whiffen v Whistler Rainbow Properties Inc. A couple, Valerie Whiffen and Arthur Craddock sued for damages when the developer, Whistler Rainbow, built a house adjacent to theirs which obstructed their views and intruded on their privacy. Their claim was based on breach of contract, breach of promise, or negligent misrepresentation.

The Court dismissed their claim on the basis that these conditions were not set out in the original purchase agreement, and that representations made to Mr. Craddock and Ms. Whiffen could not be read into the contract. 

The couple was looking to purchase one of the five lots that were being developed by Whistler Rainbow and to be built by Big Bang Construction.  They eventually became aware that a house was going to be built in the lot next to their property. The couple had concerns about the height of the house that was to be built on the adjacent property and notified the listing agent to negotiate a purchase agreement. Eventually, they moved ahead with their purchase after agreeing to two formal addenda to the purchase agreement. 

The Contract
The final agreement to purchase their home ultimately contained six initial conditions. Notably, the contract did not contain any terms and conditions relating to the height of the house that was to be built on the adjacent property.

During the development of the adjacent property, the couple said that they were constantly “pushing for comfort” as to what was going to be built.” Their concerns eventually lead to a meeting, where the architect for Whistler Rainbow said that he told the couple several times that the plans of the adjacent property were subject to change and that they “should not count on a future house at the adjacent property following the existing plans.” 

However, the next day, Mr. Garcia, who communicated on behalf of Big Bang and Whistler Rainbow, emailed the listing agent saying that “as long as Big Bang Construction builds the house…[it] will be the one shown on the plans that I showed to your client.”

The Aftermath
The design of the house that was built on the adjacent property was eventually changed to include a rooftop deck with an outdoor kitchen, a hot tub, and a bathroom. The couple claimed that the new house interfered with their view and that it compromised their privacy. They listed their house in May 2019 and could not sell it until September 2021, after spending $14,546.45 in privacy renovations. They also sold their house for what was described as well below the asking price.

Mr. Craddock and Ms. Whiffen tried to argue that the email by Mr. Garcia (which told them the plans for the house on the adjacent property would not change) was part of the contract that they signed. However, the Court rejected this argument, saying that the discussions surrounding the properties were “far ranging” and “lack[ed] the certainty required” to be read into the contract. 

Notably, Mr. Craddock and Ms. Whiffen “did not know that it was possible to include that type of term in the Contract” and their real estate agent “did not suggest that [they include] such a term.” The judge made it clear that had either party “wished to make their expectations clear, they were well able to include a term or terms dealing with those expectations.” 

If you are concerned about having future adjacent real estate developments affect the value of your property, you should consult with a lawyer. 

*Please note that this information is intended for informational purposes only. there are always other considerations and interpretations of the law.  This does not constitute legal advice. For more information or assistance with a residential tenancy eviction matter, contact our office to speak with a lawyer directly.