Lakeview condo buyers cannot cancel deals over developer change, court rules

Purchasers of more than 70 units in a Mississauga condominium project cannot use its transfer to a new developer and declarant to rescind their purchase agreements, the Ontario Superior Court of Justice has ruled.

In KS Lakeview Dixie Holdings Inc. v. Edwards, 2026 ONSC 5491, Justice Jana Steele found that the change did not materially alter what the buyers had agreed to purchase. Her September 29, 2026 decision declared their rescission notices invalid.

The Lakeview Project comprises two towers with 478 residential units, commercial space and underground parking. The respondents bought pre-construction units around April to June 2022. KSV Restructuring Inc. became receiver in November 2023, and the court authorized construction in June 2024 with PCL Constructors Canada Inc., the construction manager originally selected by Vandyk.

A court-approved sale followed in April 2026 to KS Lakeview, a single-purpose entity in the KingSett Group. Purchasers then delivered rescission notices asserting that the change in declarant was a material change under Ontario’s Condominium Act, 1998.

The purchase-time perspective

Steele acknowledged that completing the transactions would cause tremendous financial hardship for some purchasers. The decision described a condo market that had fallen about 25 per cent from its 2022 high. But the statutory inquiry focused on the bargain when it was made.

Under section 74, materiality turns on whether a reasonable purchaser would objectively have considered the changed information sufficiently important that they likely would not have entered the agreement, or would have used the initial rescission right, had it appeared in the original disclosure statement. The court therefore examined the circumstances of the 2022 purchases, rather than the buyers’ current preferences.

This material-change mechanism is distinct from the initial cooling-off protection under section 73. A purchaser’s subjective preference for Vandyk did not decide the objective test.

The units and construction remained the same

The court distinguished the developer from the statutory declarant: the property owner who registers the condominium declaration and description, a definition that includes successors and assignees. Although the disclosure statement identified the declarant, it did not identify the developer in that capacity.

The evidence showed no change to the contracted units, their floors, floor plans or amenities. PCL and the same trades continued construction. With the agreed product intact, Steele found that changing the declarant’s identity was not objectively material in these circumstances.

Earlier cases discussed in the reasons illustrated different outcomes where the bargain had changed substantially, including a penthouse losing its top-floor position and a loft being replaced by a staircase.

Disclosure and assignment arguments

The purchasers stressed the Act’s consumer-protection purpose and argued that mandatory disclosure of the declarant’s identity demonstrated its importance. Steele held that the legislation balances consumer protection with commercial realities. A requirement to disclose information does not necessarily make every change to that information objectively material.

The buyers also relied on KingSett Mortgage Corporation v. Lumina Eclipse Limited Partnership, a British Columbia decision involving allegations of serious undisclosed problems, including tax liability, suspended warranty coverage and a suspended building permit. Steele distinguished that case’s legislation and facts. Lakeview presented no comparable undisclosed event adversely affecting project viability or warranty coverage issue.

Nor did the omission of declarant changes from statutory exclusions settle whether this change met the materiality test.

The purchase agreements provided further support for the result. They expressly permitted assignment by the vendor, contemplated a declarant different from the vendor and required purchasers to accept title from the registered owner at closing. Steele found that the assignments complied with the agreements. Those provisions reinforced her conclusion that the change was not material.

The decision leaves room for a different assessment if future changes affect what buyers contracted to receive. Steele expressly recognized that a later exercise of the new developer’s discretion could produce a material change.

No party sought costs, and each was ordered to bear its own.