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Kelowna home sale lawsuit shows the 'frenzy' from speculators

Image Credit: SUBMITTED/B.C. Assessment

A lawsuit filed over a botched home and land sale shows how the frenzy of speculators drove up prices of residential real estate at the peak of Kelowna’s housing market and the case appears to be contingent on a finding of whether the selling realtor misled buyers.

For sale in this case was a residential property near the intersection of Leathead Road and Montgomery Road, not far from busy nearby Rutland Road.

Georganna Elizabeth Moore and John Bela Szabo had lived in the single family home there for 30 years before listing the property in March 2022, according to a recent decision in the lawsuit. They used Amanda Tak of Vantage West Realty and decided on a listing price of $1 million, right at or slightly below the average home price at that time, near the peak of the market. Part of the listing said this:

"Home is “AS IS WHERE IS”, value is in the land only. This unique opportunity is unheard of and rarely found in this area, it’s pretty much 2 lots in one! This property only shares property lines with one additional property and then borders Leathead, Montgomery and a huge bonus a laneway as well. Property currently allows for a carriage house to be built but the city highly encourages this property to be to be re-zoned for higher density and would have the options of re-zoning to either “C4” (mixed-use commercial/residential zone) or “UC4” (mixed-use commercial/residential zone). Priced to sell! An opportunity this rarely comes along so developers start your engines this is what you have been looking for.

City file available upon request. No showings until an accepted offer. Offers to be reviewed Saturday March 19, 2022."

Indeed it appeared to be what buyers were looking for and it was the “two lots in one” that attracted Deol. Two days before offers were due, Deol’s realtor sought more information. It was made clear the City of Kelowna owned the other lot attached to the property.

"The city did at one time offer it to my clients to purchase. Property currently allows for a carriage house to be built but the city highly encourages this property to be re-zoned for higher density and would have the options of re-zoning,” Tak told them.

Deol bid $1.3 million but when the sellers reviewed offers, they found four or five motivated bidders. Tak texted Deol’s agent with that information and said: "Pretty exciting stuff about the potentials of the two properties together I would say. You would buy 160 Leathead at the assess value from the city which is assessed at 126K. Do you want to re-submit or have you put in your max?”

Deol was still in. The price went up quickly to $1.8 million, then $2 million, then $2.2 million before Deol offered $2.45 and won the war. Tak called it a “frenzy”.

Deol paid a $100,000 deposit and immediately sought to buy the neighbouring chunk of land from the city.

That’s when things fell apart.

The city told Tak that, yes, he could buy it for fair market value, but it was so encumbered with a waterline, a power line, a gas line, Shaw/Telus materials and other rights of way that development was no longer feasible. He would have to move it all at his cost, if he even could. Firefighting water lines can’t be buried under private property.

Deol, through his realtor, told Tak he couldn’t buy it. Among other reasons they listed, Deol was just 30 years old and relying on family money which didn’t come through.

The property was listed again in July 2022 for $1.5 million before being sold in November for the original asking price — just $1 million.

The sellers naturally sued Deol for the difference in sale prices plus the $100,000 deposit — roughly $1.5 million. In his defence, Deol claims among other things that he was “misled” about the sale.

The case remains ongoing. In a decision released this week, the sellers sought an expedited trial but were refused. Justice Bradford Smith said he couldn’t decide the “central Issue” — the misrepresentation claims — without a trial.

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