Qu v. Wang (2026 ONSC 1715)
In today’s market, assignment sales can be attractive but they can also be legally dangerous if not handled properly. The recent Ontario decision in Qu v. Wang, 2026 ONSC 1715 is a textbook example of how things can go very wrong.
The Basic Facts
The case involved a failed assignment of a new-build home in Richmond Hill.
- The seller (assignor) had an agreement with a builder to purchase a home for approximately $2.89 million
- He attempted to assign that agreement to a buyer for $3.13 million
- The buyer paid a $150,000 deposit directly to the builder
- The transaction ultimately collapsed, and the seller sued for $350,000 in losses
The Central Problem: No Right to Assign
At the heart of the dispute was a simple but critical issue:
The original agreement required the builder’s written consent to assign.
The Seller never obtained that consent.
The Court made it clear:
- Without written consent, there is no valid assignment
- You cannot assign what you do not legally have the right to assign
This alone was enough to undermine the seller’s entire claim.
Fraudulent Misrepresentation
The Court found that the Seller made multiple fraudulent misrepresentations, including:
- Claiming he had the right to assign when he did not
- Stating there were $250,000 in upgrades, which were fabricated
- Promising a fourth ensuite bathroom, even though no structural changes were permitted
The Court concluded these statements were:
- Knowingly false
- Made to induce the buyer into the deal
- Relied upon by the buyer, resulting in financial loss
A Serious Red Flag: Misuse of the Deposit
One of the most troubling facts, the Buyer’s $150,000 deposit was used to replace the Seller’s bounced cheque to the builder. This was done without the Buyer’s knowledge. This significantly damaged the Seller’s credibility and reinforced the Court’s findings.
Decision
- The Seller’s claim was dismissed in full
- The agreement was found to be voidable due to fraud
- The Buyer was not required to close
Noteworthy:
In this case, the Seller was a real estate agent who not only acted for himself but also acted for the Buyer in the transaction. Here, the Seller sued, the Seller was the plaintiff in the lawsuit. All this took place after the agent had been taken to discipline and been censured by RECO!
Considerations for Real Estate Agents
This case is a cautionary tale. Assignment transactions can be profitable, but they require strict legal compliance and full transparency.
Brian Madigan LL.B., Broker