Prospective Kelowna homebuyers backed out of deal, ordered to pay over $300K
It was too late to back out when prospective homebuyers in Kelowna were refused a mortgage last year.
The bank said the home wasn't worth the agreed upon $1.1 million and wouldn't lend the money. Although the bank appeared to be correct when the home later sold for $740,000, it's up to the three who backed out of the deal to cough up the difference.
A recent BC Supreme Court decision ordered Wai Ming Fong, Xiao Li Liu and Navdeep Singh Mahli to pay the seller more than $360,000 after breaching their contract.
Jeffrey Mandl put his Ethel Street home up for sale in March 2022 asking $999,000. Within the first day of listing the house Mandl had two offers, one was from Mahli at $1.1 million. Fong and Liu were added to the contract on March 11 and they would agree to an initial closing date of May 31, which included a $30,000 deposit.
Mahli waived his right to include a clause that the deal would be subject to financing, according to Justice Dennis Hori's decision.
The buyers extended the contract twice and tried to renegotiate for a cheaper price. While Mandl allowed them until mid-July, he wouldn't renegotiate and required they put up an extra $20,000 for a deposit.
Meanwhile, Mahli's attempt to get a mortgage failed as the bank's appraisal was "significantly lower" than the $1.1 million purchase price, according to the decision.
Mahli, Liu and Fong breached their contract when they failed to buy the Ethel Street home.
Mandl filed a civil suit against them in 2023 and they would later file a counterclaim that was unsuccessful.
Mahli's realtor Jewal Brar told the court the home was "not in a habitable state," but offered no specifics and Hori found the buyers didn't provide enough proof that Mandl's property disclosure statement was untrue.
Mandl would later sell the house in January 2023 for $740,000 after lowering the price multiple times in a slowing real estate market, the decision said.
For Mandl's loss on what should have been a $1.1 million sale, the defendants were ordered to pay the difference. Hori ordered they pay him $362,920 for the missed profits and other costs, minus the $50,000 deposit Mandl was already paid.
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