Ritchie v. Castlepoint Greybrook Sterling Inc., 2021 ONCA 214

When a condominium project is cancelled, receiving your deposit back may not address the financial consequences. You may have lost years in the housing market or face a much higher price for a replacement property.

In Ritchie, purchasers sought compensation after a developer terminated agreements for pre-construction condominium units. The dispute centred on a contractual provision limiting the developer’s liability upon termination to the return of deposits plus interest.

The Ontario Court of Appeal upheld the limitation. It found that the clause clearly allocated the risk between the parties and that the incorporated Tarion provisions did not change its meaning. The purchasers’ appeal was dismissed.

The decision demonstrates that a contractual limitation can significantly affect the remedies available following cancellation. However, it does not establish that every developer can cancel for any reason or that every limitation clause will be enforceable. The particular wording and legal context remain important.

What this could look like in practice

Imagine purchasing a condominium for $650,000 and receiving a cancellation notice several years later. Comparable replacement units now cost substantially more. You want to know whether the developer must compensate you for that difference.

A useful review would separate two questions: whether the developer was entitled to terminate and what remedies the agreement permits. The cancellation notice, purchase agreement, schedules, Tarion addendum, and subsequent amendments would provide the starting documents.

Keeping those questions separate helps avoid assuming either that a refund resolves every issue or that the replacement cost is necessarily recoverable.

The takeaway

Before purchasing—and again if cancellation occurs—review both the developer’s termination rights and any clause restricting compensation. Understanding how those provisions interact is essential to assessing the dispute.

Contact JY Law to discuss your circumstances and how we may assist you.

The information on this page is provided for general educational purposes only and does not constitute legal advice. These summaries highlight selected principles and do not address every issue or subsequent legal development. Examples are hypothetical and do not predict outcomes. Rights and obligations depend on the agreement, applicable legislation, relevant dates, and particular circumstances. Reading this page or contacting our firm does not, by itself, create a lawyer-client relationship. If you have further questions or require advice about your situation, please contact us.