By Ladislav Kovac
In an era of soaring real estate prices and increasing disputes over failed pre-construction purchases, the Ontario Superior Court’s decision in DiCenzo (Linden Park) Holdings Inc. v. Sadeghyar, 2026 ONSC 1566, delivers a powerful reminder that statutory consumer protections are more than mere formalities. At first glance, the case appears to be a straightforward dispute between a condominium developer and a purchaser who could not complete a million-dollar transaction. Yet the court’s ruling transformed a failed real estate deal into a significant statement about compliance, disclosure and the balance of power between developers and consumers. By holding that a developer’s failure to provide the mandatory Condominium Buyers’ Guide rendered the agreement non-binding, the court reinforced the principle that consumer protection legislation must be interpreted and applied in a manner that gives meaningful effect to the rights it was designed to protect.
By now many of you will have heard of the Sadeghyar decision. In brief, the builder and the purchaser entered into a pre-construction purchase agreement in early 2022. When it came time to close in 2024, the purchaser was not able to complete the transaction. A year later when the builder sued for damages, the purchaser for the first time demanded return of its deposit. The purchaser’s argument was that he had never received the condominium guide and was thereby able to rescind the purchase agreement at any time, even after he had failed to close and it had been terminated by the builder.
The law itself is drafted clearly. Subsection 73(1) of the Condominium Act provides that a purchaser can rescind a transaction at any time “before accepting a deed to the unit,” provided that the notice of recission is delivered within 10 days of the receipt by the purchaser of the disclosure statement, condominium guide or copy of the purchase agreement. While not directly addressed in the case, Subsection 72(2) of the Condominium Act further provides that a pre-construction purchase agreement is not binding on a purchaser until they receive the disclosure statement and condominium guide.
The facts in Sadeghyar were particularly damning. The purchaser signed the purchase agreement, which included a receipt for the disclosure and the condominium guide, on March 4, 2022. On March 7, 2022, the builder sent a copy of the disclosure to the purchaser via e-mail. However, the builder could not find any e-mail proof that the condominium guide had ever been delivered. Given that the acknowledgement of receipt had been signed before any disclosure materials had been delivered to the purchaser, and given that all deliveries had been made via e-mail and no proof of delivery of the condominium guide was produced by the builder, the court determined that the builder could not prove that it had delivered the condominium guide. Accordingly, the court found that the purchase agreement was not binding and could be rescinded.
We understand that at the time of this article, the Sadeghyar case is being appealed, but in the meantime it serves as a cautionary note to builders. Beyond actually producing the disclosure and condominium guide to the purchaser and having a receipt signed on an appropriate date, there are other more nuanced questions which remain unanswered. If a link to the digital version of the condominium guide is provided, is that sufficient delivery? If an older version of the condominium guide is provided, will that be satisfactory (it being noted that the Condominium Authority of Ontario has refused to provide any notice to lawyers or builders of updates to the condominium guide despite our repeated requests for them to do so)? If the disclosure and condominium guide are provided to a purchaser but are caught in a spam filter or otherwise rejected by the purchaser’s e-mail provider, has the builder complied with its obligations under the Condominium Act?
Until we have more clarity, the safest approach is to deliver physical or electronic PDFs of the disclosure and condominium guide (ensuring that you are downloading the most recently available guide from the Condominium Authority of Ontario’s website on the actual date of delivery), to clearly record and document the delivery internally, and to have a receipt signed by the purchaser only after such delivery is made. It is unfortunately another administrative burden that you are now tasked with, but Sadeghyar demonstrates that the risks of non-compliance may far outweigh the effort required to ensure proper delivery and record-keeping.
Only 10 years ago, regulatory compliance was a much easier task. Back then it was as simple as the disclosure statement and a Tarion addendum. Today there is the disclosure, the addendum, the condominium guide, the warranty information sheet (which must now be obtained independently from the builder portal directly for each and every transaction) and the condominium information sheet. In their wisdom, our governments have decided that to protect consumers who may have difficulty reading dozens of pages of contract, they should be provided with dozens of pages more. I ponder whether any purchasers actually read the additional regulatory materials and, if they do so, whether they are actually better informed or would make different decisions.
In Sadeghyar’s instance, he was a university educated real estate professional who obtained his real estate licence in 2017, was engaged in property sales including new-build condos, and would therefore have seen the condominium guide before. Certainly by way of his profession, Sadeghyar was aware of the risks involved with new home purchases and the evidence in the case demonstrated that he had taken such risks in the past. If the builder had actually delivered the condominium guide to Sadeghyar, I have no doubt he never would have looked at it. But the builder’s failure to strictly meet this technical requirement meant that Sadeghyar saved (and the builder lost) $340,000. Those who wish to avoid similar consequences should take a close look at their sales processes.
Since writing this article, the court of appeal decision was released, which dismissed the appeal by the builder and upheld the original trial decision.
Ladislav Kovac is Partner at Robins Appleby LLP. robinsappleby.com
