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REAL ESTATE regarding the risk that owners may decide to rent out their units on a short-term basis. The developer had provided assur- ances in the pre-sale disclosure statements that the building was not designed for, or intended to be used for, hotel-style short- term rentals. In the municipal develop- ment permit it was described as a mul- tiple-unit residential dwelling tower. But the court found the disclosure statement failed to point out that a secondary per- mitted use under the municipal zoning was "hotel/motel accommodation within a multiple residential unit." This would make it possible for owners to rent out their units and for the strata board to allow this practice. The court accepted the evidence of the 12 plaintiffs in the case showing that short-term rentals were occurring and were permitted in the building — and that building permits were being issued Thank You! for that purpose. The pre-sale con- tracts were ruled unenforceable and the developer ordered to return all deposits to the plaintiffs. Chisholm does not question the plain- tiffs' motives. He says he understands owners of condo units may feel that vacant landlords or transient occupants of a rental unit will not take good care of the building. However, he says, the ruling will "open the floodgates" to other people who don't necessarily care about short-term rentals but want to walk away from their contracts for other reasons. What the ruling does, according to Chisholm, is clarify the position of the B.C. courts on how much detail must be provided in a disclosure statement. Until now, he says, many developers have presented details that they considered relevant and not necessarily followed all of the formal requirements set out for disclosure statements under the act. In this case, the developers apparently overlooked the possibility that second- ary uses permitted under the munici- pal bylaw could be a material fact that should be included. The risk to developers of missing Canadian Lawyer Magazine recently honoured Howie, Sacks & Henry by naming HSH one of Canada's "Top 5 Personal Injury Boutique Law Firms". We want to thank the many of you who have made this honor possible through your numerous referrals. Your confidence in us is greatly appreciated. M i l h If you have a serious personal injury or medical malpractice matter that would benefit from our help please give any of us a call. Referrals are respected and important to everyone at HSH. We're on your side Howie, Sacks & Henry llp PERSONAL INJURY LAW 20 Queen Street West, Suite 3500 Toronto, Ontario, Canada M5H 3R3 Tel 416-361-5990 | Toll Free 877-474-5997 www.hshlawyers.com 22 M AY 2011 www. CANADIAN Lawyermag.com ntitled-1 1 4/15/11 11:24:31 AM some relevant detail is particularly ser- ious because REDMA does not require that purchasers prove they were relying on the misrepresentation contained in the disclosure statement. "None of these pur- chasers who got out of this contract need to argue, 'Had I known short-term rentals would be allowed I never would have bought.' That's irrelevant. The fact that the developers missed doing something required by them under the act allows a purchaser to get out," says Chisholm. As a consequence of this ruling, Chisholm says he is advising developer clients to "list everything" in their disclosure statements. For example, he says they would be better off "actually copying and pasting the zon- ing, as opposed to paraphrasing and run- ning the risk that you get it wrong." Developers are beginning to get the message, says Johnston: "They're disclos- ing everything because they're so nervous of being offside of the act." Meanwhile, in Ontario, where pre- sale disclosure rules are embedded in the province's Condominium Act, purchasers are having much less success when they