A would-be Richmond homebuyer is out more than $400,000 after failing to secure a mortgage for a home she had already moved into. The B.C. Supreme Court upheld a one-page hand-written contract in Chinese between defendant Xue Yun Li and plaintiffs Hong Yang and Yuzhang Wang for Li to buy Yang and Wang’s home on Blundell Road in Richmond for $2,888,000.
Unusual Contract Terms
The deal included unusual terms, allowing Li to move into the two-storey home after paying a $100,000 deposit, which she did in May 2017. Per the contract, Li was required to make three additional payments toward the purchase price before the sale would be completed:
- A $100,000 payment due in July 2017
- An $800,000 payment due in December 2017
- The remaining balance due once Li had sold a home she owned on West 20th Avenue in Vancouver.
While Li was required to pay all property taxes and other property expenses while she lived in the home, the title remained under Yang and Wang’s names until the full purchase price had been paid.
Failure to Complete Payments
However, while Li had made the May and July 2017 installments totaling $200,000, she did not make the December 2017 payment for $800,000, nor the remaining balance, despite having sold her Vancouver home in November 2017 for $3,390,000. Li received proceeds of $1,261,039.30 from the sale of her home but told Yang and Wang that she had been unable to obtain a mortgage that would cover the remainder of what she owed to complete the sale.
After months of Li telling the sellers about her efforts in trying to obtain financing, Yang and Wang ordered her to vacate the property in April 2018. Yang and Wang eventually sold the Blundell property for $2,480,000 and sued Li for breaching the sales contract, seeking damages equal to the difference between what Li had agreed to pay for the property and what it ultimately sold for, plus real estate fees, property expenses, and interest.
Court’s Decision
In deciding for Yang and Wang, Justice Steven Wilson noted that Li likely had no intention to purchase the property, given that while she claimed to be unable to acquire a mortgage, she managed to buy two other properties in Richmond in 2018, securing a mortgage both times. In January 2018, Li purchased a $699,000 three-bedroom condo on Granville Avenue, and in April 2018, purchased a $2,720,000 five-bedroom house on Camsell Crescent.
“This evidence suggests she was capable of securing mortgage financing on her own accord and could have made the same efforts regarding the Blundell property,” Wilson stated in his decision.
Contract Disputes
Li argued that the Chinese contract was “uncertain” and therefore unenforceable because it did not set a specific interest rate. She also argued that the closing date was unspecified. However, Wilson noted that Li paid the interest, the calculation of which was included in a spreadsheet provided to her by Yang and Wang.
“Ms. Li’s evidence was that she did not bother to read the spreadsheet,” Wilson said in his decision. “That may be true; however, it was readily apparent on the face of the spreadsheet that she received as to how the interest was calculated and she made the payment.”
Wilson also stated that the lack of a specific closing date was not “fatal” to the contract. Wilson ordered Li to pay the plaintiffs the full amount of $408,000, minus the $200,000 she already paid under the contract, plus interest and court costs.
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