Executive Summary
In Dicenzo (Linden Park) Holdings Inc. v. Sadeghyar, 2026 ONSC 1566, the Ontario Superior Court of Justice delivered a significant reminder to builders, developers, and transactional counsel that strict statutory compliance in condominium sales is not optional.
The failure to prove delivery of a single mandatory document, the Residential Condominium Buyers’ Guide, rendered a $1 million pre-construction purchase agreement non-binding on the purchaser. As a result, the builder lost its claim to the purchaser’s deposit and damages exceeding $150,000.
This decision underscores the importance of robust document delivery systems and evidentiary recordkeeping in electronic real estate transactions.
Background
In March 2022, the purchaser agreed to buy a pre-construction condominium unit in Hamilton, Ontario for approximately $1,009,150.
The transaction was completed electronically. The purchaser signed an acknowledgement confirming receipt of several required documents, including: the Agreement of Purchase and Sale; the Disclosure Statement; and the Residential Condominium Buyers’ Guide (the “Guide”).
Nearly two years later, shortly before the scheduled closing date of February 23, 2024, the purchaser advised that he was unable to close due to financing difficulties.
The builder subsequently resold the unit for $699,900, sustaining a substantial loss, and sought forfeiture of the $121,098 deposit and damages totaling $218,804.46.
The purchaser countered that the agreement had never become binding because the Guide was never delivered.
Statutory Framework
Under section 72(1)(b) of the Condominium Act, 1998, a declarant must deliver a copy of the applicable condominium guide to every purchaser.
The consequence of non-compliance is significant. Under section 72(2), the agreement is not binding on the purchaser until the required disclosure materials have been delivered.
Moreover, the purchaser’s 10-day rescission period does not begin until receipt of the agreement, the disclosure statement, and the condominium guide. Accordingly, when the Guide is never delivered, the purchaser may rescind at any time before title transfer.
Court’s Findings
Justice Bordin found that the builder failed to establish, on a balance of probabilities, that the Guide had ever been delivered.
Although the purchaser signed an acknowledgement, the Court identified serious reliability concerns: the acknowledgement stated documents were provided on March 4, 2022; the agreement itself was not fully executed by the builder until March 5, 2022; the disclosure statement was not transmitted until March 7, 2022; and the builder produced no email record, attachment log, portal history, or other proof showing the Guide had been sent.
Thus, the Court concluded that the statutory requirement had not been satisfied.
Builder’s Defences Rejected
1. Estoppel and Affirmation
The builder argued that the purchaser affirmed the transaction by paying deposits, selecting upgrades, and signing amendments.
The Court rejected this argument, holding that affirmation under the Act requires acceptance of title transfer, which never occurred. The Court further held that estoppel cannot be used to defeat statutory consumer protections enacted in the public interest.
2. Sophisticated Purchaser
The purchaser was a licensed real estate agent with experience in new-build transactions. The builder argued his sophistication meant he should be held to a higher standard. The court was clear: sophistication is irrelevant. The Act imposes the obligation on the builder regardless of who the purchaser is.
3. Tactical Reliance / Bad Faith
The builder submitted that the purchaser was improperly relying on the Act merely to escape a deal he could no longer finance. The Court distinguished prior appellate authority and held that this case involved an objective statutory deficiency, particularly the builder’s failure to provide the Guide. The purchaser was therefore entitled to rescind.
Key Takeaways for Transactional Lawyers
1. Delivery Records Are Essential
Builders must retain clear documentary evidence that all mandatory documents were transmitted, including timestamps and delivery confirmations.
2. Acknowledgements Alone May Be Insufficient
Signed acknowledgements can be undermined where dates are inaccurate or contradicted by surrounding evidence.
3. The Rescission Clock Does Not Start Without Full Delivery
Until all required documents are provided, the purchaser’s rescission rights remain open. The 10-day clock doesn’t start without all three documents.
4. Separate and Verify Each Required Document
Boilerplate acknowledgements that bundle multiple documents together create credibility problems if any one document was not actually delivered on the date stated. Consider itemizing delivery of each required document separately, with individual timestamps and transmission records.
5. Purchaser Sophistication Does Not Reduce Compliance Duties
Statutory obligations remain the builder’s responsibility regardless of the purchaser’s expertise.
6. Administrative Errors Can Become Litigation Losses
What appears to be a minor paperwork issue may determine the enforceability of a seven-figure transaction.
Practical Recommendations for Builder Clients
- Implement digital closing and sales checklists;
- Use secure platforms with download and transmission logs;
- Issue separate receipts for each statutory document;
- Audit sales files before firm closing dates; and
- Train sales staff on mandatory disclosure obligations.
Conclusion
Dicenzo v. Sadeghyar is a cautionary example of how procedural non-compliance can override commercial expectations. The builder may have intended to comply and acted in good faith, but intention could not substitute for proof. For developers and their counsel, the lesson is clear: if delivery cannot be proven, compliance may not exist.
