A ‘Fornever’ Home: How A Halifax Couple Lost Their House Before It Was Even Built
HALIFAX–A Halifax woman who recently won a maximum settlement in small claims court against a housing company says she is exhausted that her legal ordeal isn’t yet over.
Just before Christmas, Joanne Kimm and her husband John won a $25,000 court case against Almadina International, after a deal to buy a pre-built house fell through.
The couple had originally agreed to buy the property for more than $300,000. But after backing out of the deal, the company put the house on the market and sold it for more than $400,000.
Small claims court gave the couple $25,000 for their out-of-pocket expenses plus additional money for losing out on the increased market of their should-have-been home.
But Kimm says, on the exact same day she received the $25,000 cheque, she received word that the housing company was appealing the decision.
A New Home At A ‘Fantastic’ Price
Joanne Kimm and her husband thought they had found the site of their new home, after moving to Halifax from Victoria, British Columbia. Instead, they lost their house before construction was even finished.
The ordeal began back in May of 2020. After moving to Halifax and renting an apartment for a year, the couple decided it was time to buy a new house.
They discovered a subdivision on Honeygold Drive in Spryfield owned by McIntosh Run Estates. There, they found a parcel of land for sale. After seeing the design and layout of what the future house would look like, they put in an offer.
The overall cost of the build would be $324,000, which included some upgrades. Compared to the costs of housing in Victoria (Kimm jokes that BC stands for “Bring Cash”), it was a steal of a price.
“The prices were fantastic,” said Kimm. “For us, coming from Victoria-wow this is a great price.”
Of course, to build the house, Kimm and her husband had to get a mortgage. The original closing date for the house was November 17 but they were able to get the date amended to October 23, since the loan would expire after that.
For a while after signing the contract, Kimm assumed everything was going fine with the build since she didn’t hear of any delays.
“New builds do have delays, and our realtor told us that, so we were aware it could happen,” said Kimm.
“We were assured by the builder October 23 would work. As far as we knew, that’s when we were closing… and we had no communication from their realtor or the builder about any delays.”
Missed Deadlines And A New Agreement
Around Thanksgiving of 2020, Kimm’s realtor reached out to representatives of Almadina to check in on construction progress. According to Kimm, Almadina told her realtor things were on track for November 17, rather than the amended date of October 23.
The confusion and headaches escalated from there.
Kimm recalls the builder’s real estate agent trying to get the couple to sign a new amendment to close the deal on November 17. But this deal wasn’t ideal for Kimm and her husband, who needed to be out of their apartment by the end of October.
“Our apartment had been rented, we had nowhere to go,” she said. “We didn’t sign the amendment and the lawyers got involved at that point. We had to get an extension for funding because, of course, ours was running out on the 23rd.”
Before the end of October, a new agreement was reached between the two parties, where the new closing date would be on or before November 30. This deal was contingent on Kimm securing an extended mortgage by November 10.
‘Shock’ After Almadina Back Out
Because the Kimms no longer had an apartment, the builder agreed to pay $1,500 towards her living expenses.
When the all-important date of November 10 came, Kimm’s lawyer sent a seemingly standard email to Almadina’s legal rep to inform them that the mortgage lender was willing to extend financing. Even though the funding looked secure, however, the email mentioned it could take several days to receive “final approval.”
This should have been welcome news to the builder. After not meeting the original October 23 amended deadline, this funding extension would give them until the end of November to complete the house.
Instead, the company used the fact that the funding extension wasn’t fully guaranteed to terminate the contract entirely.
On November 12, legal counsel for Almadina sent an email to Kimm’s lawyer stating:
“…You sent me an email on November 10th advising that the Purchaser did not yet have financing and asking for an extension…This request was rejected by the seller.
“Therefore the transaction is terminated and our client will be instructing the realtor to return the deposit to the purchasers.”
Kimm was shocked when she found out Almadina wanted to cancel the contract. To this day, even after a court hearing, she says the company never explained their motivation.
“We’re just regular people; we wanted to buy a house,” she said. “I’ve never experienced anything like this before.”
Even Kimm’s mortgage broker was surprised by the news.
“My mortgage broker emailed me and said ‘we’ve got the funding there, it’s all approved. We’re ready to go’,” she recalls.
Maximum Penalty For Contractor
When coming to its decision in favour of Kimm, the court looked at the exact wording that was used when the two sides made the fateful amendment back in October:
“This agreement is conditional upon the buyer securing financing no later than November 10, 2020. Should notice be given to the contrary (emphasis added), the buyers (sic) deposit will be returned without interest or penalty.”
In court, the company’s lawyer argued that the November 10 email, which stated that funding was secure but wasn’t finalized, qualified as notice.
The court, however, disagreed with this argument.
The adjudicator found that the email in question was meant to negotiate an extension, not to inform Almadina there was no funding. He even mentioned that email exchanges two days later, between the parties’ realtors, indicated they were trying to salvage a deal.
In totaling the damages incurred by the Kimms, the court adjudicator gave $9,038.83 for out-of-pocket expenses.
This was because, without a house, the couple stayed in a hotel between October and January and had to rent storage lockers.
The most interesting line item of the damages is the lost market value on the property. It was revealed through the legal process that, after taking the house away from the Kimms, Almadina put it back into the free market.
It eventually sold for $456,000- six figures more than what the Kimms were going to pay.
But because small claims court can only award maximum settlements of $25,000, the adjudicator could only give $15,961.17 for this lost value.
Kimm thought about suing Almadina for the more than $100,000 in lost property value but ultimately felt it would be too expensive and time-consuming to go to a higher court.
“We can’t afford to take them to Supreme Court,” said Kimm. “Our losses are greater than what we’re suing for. But we’re taking them to small claims court because we can’t afford to take them (to a higher court) because it would wipe out all our savings.”
Tears And Validation
When Kimm found out she won the case back in December, she broke down in tears. After more than a year of mental fatigue and legal fees, the court had vindicated the reasons for her struggle.
“It was a whole year of my life where I couldn’t really move forward,” she said. “I couldn’t even go into that subdivision physically because it was so raw. But finally, somebody understands.
“Finally, someone has validated what I was trying to say all along.”
But now any sense of relief has been replaced by stress due to the notice of appeal. The last thing Kimm wants is to have another protracted legal battle.
Kimm says she was offered an easy way out by Almadina. She claims that the company offered her a settlement (less than $25,000) to avoid an appeals process. She declined the offer.
Now, Kimm and her husband have $25,000 they can’t spend because, if they should lose the appeal, they would have to pay some or all of it back.
But should the appeal be dismissed Kimm will, poetically, use that money for a down payment on a new home. In just two years the Almadina deal fell through, however, home prices in Halifax have skyrocketed.
The average price of a house in Halifax is nearing half a million dollars, making the $324,000 deal the Kimms signed two years ago look like a steal in comparison.
Huddle reached out to Almadina’s lawyer for comment but he declined. Huddle also tried reaching out to the company directly, but our calls were not returned.
Derek Montague is a Huddle reporter in Halifax. Send him your feedback and story ideas: [email protected].