Backing out of a real estate sale cost this B.C. couple $1M
A wealthy Vancouver couple has found themselves on the hook for almost $1 million after they reneged on a multimillion-dollar real estate deal and the property owner sued.
Na Cao gave a multitude of reasons and blamed others for why she and her husband Xin Qiang Li backed out of the $4.5 million property sale, but B.C. Supreme Court Justice Matthew Kirchner laid the blame completely on her.
The case dates back to 2016 when Cao and her husband put an offer in on a $4.5-million house in Tsawwassen.
However, friends told the couple that the house wasn't worth $4.5 million and Cao decided not to pay the $300,000 deposit and backed out of the deal.
The property's owner Jeffrey Kaltenegger then sued.
According to a Dec. 16 B.C. Supreme Court decision, Kaltenegger argued that he sold the property 18 months later for $3,480,000 – $970,000 less than Cao agreed to pay, so the couple owed him $970,000.
Cao and her husband – who currently live in an $11 million house – argued they didn't understand that the contract was still valid if they didn't pay the deposit.
The couple blamed their realtor Jia (James) Liu and the Sutton Group West Coast Realty for their misunderstanding and separately launched a civil case against the realtor and the brokerage.
Cao gives a multitude of reasons why they backed out of the purchase and blames in part that the property line was misrepresented as some of what appears to be the mowed lawn backyard is actually Tsawwassen First Nation land.
Cao accuses Kaltenegger of misrepresenting where the backyard ended and that is reason enough for her to rescind the contract.
However, Justice Kirchner didn't buy it.
"Mr. Kaltenegger engaged in no unconscionable or bad faith conduct to take advantage of what might have been a misapprehension," the Justice said. "It was for Ms. Cao to investigate the property line if that was important to her."
The couple also blamed the realtor for giving them incorrect advice about pulling out of the contract.
But again, the Justice didn't buy it, saying that multiple WeChat messages discussing the deal don't mention the alleged advice.
The couple also didn't point the finger at the realtor until they were "deep" into the litigation.
"The late introduction of this alleged representation undermines its credibility, particularly when the WeChat messages are silent about it," Justice Kirchner said.
The Justice also pointed out that the couple is well-versed in business and contracts.
While the Justice found the realtor didn't meet the standard of care in some circumstances, the mistakes made did not affect the couple's decision to back out of the contract.
Ultimately, the Justice says the lost sale lies entirely at the feet of Cao and her husband and ordered them to pay $970,000 to the property owner.
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