Be Careful with the Legal Description
Northfield as Vendor sold a parcel of property to North American on 12 June 2007. The parcel comprising 7.31 acres was located at the southwest corner of an intersection in the city of Waterloo. It was sold conditional upon rezoning which took 6 years.
The Agreement of Purchase and Sale is somewhat problematic when it comes to the property. The Court considered this case Northfield v North American in 2015.
There were in fact two parcels of property:
Block 89 with its own PIN
Block 94 with its own PIN
Block 89 is the large parcel suitable for development. Block 94 is a one foot reserve around the perimeter of Block 89 keeping it away from the adjacent municipal roadway, and thereby making Block 89 “landlocked”.
You will appreciate that if you want to develop a plaza on the corner, you will need to be able to access the road. Helicopter traffic is just not enough!
The purchased property is described in the APS as:
“approximately 7.31 acres located on the southwest corner of Northfield Drive and Bridge Street in the City of Waterloo as shown in red on Schedule A attached to this agreement”.
There was no legal description of the purchased property in the APS.
There were also some additional material facts that were disclosed to the Court:
a) Northfield sent to North American prior to the execution of the APS a survey showing that the one-foot reserve was a separate block having a separate PIN (parcel identification number);
b) North American prepared the first draft of the APS and that this included the PIN for Block 89 alone.
The PIN was deleted from the APS by Northfield;
c) a plan of subdivision was described as a permitted encumbrance in the APS.
This plan of subdivision showed the one-foot reserve being retained by the subdivider.
The matter went to the Court on a motion in November 2015, namely, eight and one half years after the deal was struck, and we still have an actual Trial to resolve issues. The preliminary motion only dealt with the registration of the Certificate of Pending Litigation (CPL) which was left in place.
The actual description of a property is very, very important. In fact, it’s worthwhile conducting a search of the title before the Offer is drawn in order to ensure its accuracy.
It should also be noted that the Description of the property is also one of the essential contract terms. If it is not clear to a Court, then, there is no contract.
In this case, if you were to develop the property, you would need both Block 89 and Block 94.
Brian Madigan LL.B., Broker