Builder Terminated New Home Agreements and Resold the Lots: Court Awards Purchasers $440,200

In 13405176 Canada Inc. et al. v. James Selkirk Custom Homes Ltd., 2026 ONSC 600, the Ontario Superior Court of Justice granted summary judgment to our clients, the purchasers of two new homes in Napanee. The builder had terminated their agreements and resold both lots at a profit. Gregory Weedon of Weedon Law acted for the purchasers.

The court awarded $440,200 in damages for loss of bargain. With pre-judgment interest of $29,621.20 and costs of $33,000 fixed afterwards, the judgment totalled $502,821.20, plus post-judgment interest.

Writs of seizure and sale were then filed. In March 2026, about six weeks after the decision, the builder paid the judgment in full, with post-judgment interest and enforcement costs.

What happened

In October 2020, our clients signed agreements to buy Lot 54 and Lot 56 in a new Napanee subdivision, at prices of $364,900 and $374,900. Both agreements became firm. The builder later extended the closing dates to April 29, 2022 (Lot 56) and May 27, 2022 (Lot 54).

In November 2021, a new Schedule "I" was added to each agreement by amendment. It said the agreement would be null and void if the plan of subdivision was not registered by December 31, 2021. The town had already given final approval of the plan in August 2021, but the plan was not registered until May 26, 2022.

The builder refused to close, first citing alleged unresponsiveness by the purchasers. After the lawsuit began, it relied on Schedule "I" instead. Without notice to our clients, it resold Lot 54 for $530,000 and Lot 56 for $650,000.

The Tarion Addendum limits early termination conditions

Every agreement to buy a new home from a builder in Ontario must include the Tarion Addendum. It is mandatory under the Ontario New Home Warranties Plan Act and its regulations. Paragraph 6 of the Addendum deals with "Early Termination Conditions", meaning conditions that let a deal end before closing.

Under paragraph 6(b), the vendor may include only the types of conditions listed in Schedule A, plus those in paragraphs (j), (k) and (l). Any other condition for the vendor's benefit is null and void and not enforceable by the vendor. The rest of the agreement remains valid.

Schedule A is a closed list. It allows conditions tied to receiving "Approval" from an "Approving Authority", meaning a federal, provincial or municipal government or governmental agency. It does not list "registration" of a plan of subdivision.

The court's decision

Justice Lacelle held that Schedule "I" was an impermissible early termination condition and therefore null and void. The court drew on the principles summarized in Reddy v. 1945086 Ontario Inc., 2019 ONSC 2554. Under those principles, the new home warranty legislation is consumer protection legislation, interpreted broadly, and required terms are construed strictly, with ambiguity resolved in the consumer's favour.

Reddy also confirms that the Addendum prevails over any conflicting term and that contracts should be read to avoid commercial absurdity. The court accepted our argument that treating "registration" as the same as "approval" would be absurd. Any builder could then escape a firm agreement simply by not registering a plan the municipality had already approved.

The court also found a second, independent breach: the agreements required the builder to act diligently to obtain Planning Act compliance. All approvals were in place by August 2021, and the builder admitted that its own agent registers the plan. There was no evidence of diligence before the May 2022 registration.

Why summary judgment was appropriate

The builder argued that a full trial was needed. The court disagreed, because the case turned mainly on interpreting the contract and the Addendum.

Each side must put its best foot forward on a summary judgment motion. The builder filed little competing evidence on points it could easily have addressed.

The builder also refused to answer questions and refused to produce its resale agreements. The court drew an adverse inference from those refusals. It inferred that the resale dates coincided with the scheduled closing dates.

How damages were measured

The court followed The Rosseau Group Inc. v. 2528061 Ontario Inc., 2023 ONCA 814. The normal measure is the difference between the contract price and market value on the scheduled closing date. We had argued for a later assessment date, but the court applied this presumptive rule and used each agreement's scheduled closing date.

The court found the builder's actual resale prices were the best evidence of market value, and preferred them to the appraisals in the record. That produced a loss of bargain of $165,100 on Lot 54 and $275,100 on Lot 56. The total damages award was $440,200.

What purchasers should take from this case

A builder's notice that your agreement is "null and void" is not the final word. Whether a termination is valid depends on the wording of the agreement, the Tarion Addendum and the facts. If a builder purports to terminate your agreement:

• Do not accept the termination, sign a release or take back your deposit without legal advice first.

• Keep everything: the agreement, every amendment and schedule, the Tarion Addendum, deposit receipts, closing date notices and all emails and letters.

• Confirm in writing, through your lawyer, that you remain ready, willing and able to close.

• Note any condition the builder relies on, and whether it fits within Schedule A of the Addendum.

• Get advice quickly. Limitation periods apply, and early steps can affect the remedies available to you.

Here, the condition was added by amendment more than a year after signing. It was still subject to the Addendum's limits, and the court refused to enforce it.

How we can help

Weedon Law acts for purchasers and vendors in new home and pre-construction disputes, including terminated agreements, deposit claims and builder closing adjustments. Gregory Weedon is certified by the Law Society of Ontario as a Specialist in Real Estate Law and as a Specialist in Civil Litigation. If a builder has cancelled or threatened to cancel your agreement, contact us to discuss your options.

Past results do not guarantee a particular outcome. General information only, not legal advice.