July 22, 2006
Leaky condo lawsuit offers lessons for all
When former MP and journalist Simma Holt bought a Port Moody, B.C., condo back
in early 1999, she had no idea that the purchase of her modest retirement home
would result in years of litigation against her real estate agent.
The case came to an end earlier this month when the B.C. Supreme Court
ordered the agent to pay Holt almost $20,000 in damages for negligent
It all started when Holt met real estate agent Ada Van Leeuwen at a local
shopping mall. During one of their early conversations, Van Leeuwen told Holt
she had heard of problems in some condominium buildings. In her evidence at
trial, Van Leeuwen admitted, "I assured her I would not sell her a leaky condo."
For years, British Columbia has been plagued with thousands of leaky
condominium buildings. Poor construction led to water penetration through the
building envelopes, and the moisture inside the units created toxic mould.
Repair bills for many buildings ran into millions of dollars, and many
individual units had six-figure repair bills.
The widespread faulty construction took a huge human toll. Tens of
thousands of B.C. families continue to suffer emotionally, financially and
physically. They have been living for years with leaks, rot and mould in their
homes, and thousands had declared bankruptcy.
A commission chaired by former premier Dave Barrett was critical of the
bankrupt New Home Warranty of British Columbia Inc., which had assets of about
$22 million and faced claims from leaky-home owners totalling hundreds of
Prior to closing, Van Leeuwen read the seller's property disclosure
statement, which indicated that the sellers were aware of structural problems,
leakage and unrepaired damage. She contacted the seller's real estate agent, who
told her the answers referred to other buildings in the condominium complex, but
not the building where Holt was purchasing.
Van Leeuwen testified that she read the minutes of the condominium board
meeting, which reported on an engineering study that noted all five buildings in
the complex had some degree of leakage problems.
At the time, everyone apparently thought New Home Warranty of B.C. would
repair the problems. No one expected it to go bankrupt in March 1999.
Holt's purchase closed in May 1999. Two days later, she left on vacation.
When she returned, she found a note from the condominium corporation advising
her she owed special assessments in excess of $40,000.
She later recovered $16,000 from the municipality for approving faulty
construction, and $10,000 from a holdback the seller agreed to on closing.
Facing a loss of more than $14,000, Holt sued her agent. At trial, Holt
testified that she suffered coughing, breathing and eye problems from the mould
in the unit. Wearing a mask didn't help, and she was eventually forced to move
Van Leeuwen testified that she acted reasonably in failing to warn Holt
not to complete the closing, because it was reasonable to believe the New Home
Warranty corporation would cover the problems.
After a three-day trial, Justice Victor Curtis of the B.C. Supreme Court
ruled Van Leeuwen failed in her duty to her client.
"She told her she would not sell her a leaky condo and that is exactly
what happened, in circumstances in which Ada Van Leeuwen either knew, or ought
to have known, the condominium had significant water ingress problems," the
"I find that Ada Van Leeuwen negligently misrepresented to Simma Holt the
state of the condominium being purchased, and that (Holt's) interests were
properly protected when they were not," he added.
Ruling that Holt would not have purchased the unit if she had been aware
of the problems, the judge awarded her $14,527 for the remaining special
assessments she had to pay, plus general damages in the amount of $5,000. The
issue of court costs has yet to be decided.
Holt, who is now 84, moved out of the condo to continue her writing
career from another location.
"She really seduced me into buying this, and I trusted her implicitly,"
she told the Vancouver Province. "Never trust anybody."
Not bad advice.
Bob Aaron is a Toronto real estate lawyer. He can be reached by email at email@example.com, phone 416-364-9366 or fax 416-364-3818.
Visit the Toronto Star column archives at http://www.aaron.ca/columns for articles on this and other topics or his main webpage at www.aaron.ca.