A Kelowna property listed for $1 million back in March 2022 sold for $2.45 million after a chaotic bidding war by several developers. But the matter is now winding its way through the courts after the deal fell through.
Georganna Moore and John Szabo had lived at 165 Leathead Road for more than 30 years, but with plans to move to Alberta, they listed their 0.27-acre property in March 2022 with an asking price of $1 million.
The listing described the property as an “incredible development opportunity” that was “priced to sell.”
“An opportunity [like] this rarely comes along so developers start your engines this is what you have been looking for,” the listing stated.
On March 19, just four days after the property was listed, a bidding war ensued, with four parties submitting offers ranging from $900,000 to $1.3 million.
“I would describe the situation as a 'frenzy' as agents kept calling me with their prices and the offers for the Property kept climbing,” the sellers' realtor Amanda Tak said in a deposition.
The offers climbed rapidly throughout the day, to $1.8 million, then $2.2 million. Finally, the couple accepted Rajveer Deol's bid of $2.45 million, and Deol sent over a $100,000 deposit a few days later.
But things went off the rails when Deol's realtor Aman Kandola reached out to the City of Kelowna about a small adjoining property at 160 Leathead Road that's owned by the city. Prior to accepting Deol's offer, Tak had told Kandola that the city had offered the small property to her clients about 25 years prior.
“Pretty exciting stuff about the potentials of the two properties together I would say,” Tak texted Kandola on the morning of March 19. “You would buy 160 Leathead at the assess value from the city which is assessed at 126K.”
But in late April 2022, a City of Kelowna employee told Kandola staff would not recommend the sale of 160 Leathead due to utility infrastructure located on the small property. She said if Deol were to purchase the lot, the cost of relocating the infrastructure would fall on Deol, which she expected would “be cost prohibitive to purchasing the lot.”
On June 6, 2022, Tak says Kandola called her and told her Deol would likely be unable to purchase the property.
“[Deol] was about 30 years old and had been relying on funds from his family which did not work out and consequently he was unable to obtain financing to complete the transaction,” Tak said in her deposition.
The following month, the sellers terminated the contract and moved to Alberta. They re-listed the property for $1.5 million, but amidst a rapidly changing housing market, they received no offers. After reducing their asking price a couple more times, they finally sold the property to a new buyer for $1 million, completing the sale in November 2022.
Moore and Szabo have now filed a lawsuit against Deol, claiming damages of more than $1.46 million, including the forfeiture of the $100,000 deposit, for breaching their contract, which led to them having to sell the property for far less. But Deol says he didn't breach the contract, as there were key elements that were misrepresented in the property listing.
In a recent decision, Justice Bradford Smith ruled the matter is not appropriate for an abbreviated “summary trial,” and a full trial is appropriate given the need to assess the credibility of potential witnesses.
The allegations from the lawsuit remain unproven at this point.
Meanwhile, a development proposal for the property is currently before the City of Kelowna, having first been submitted last fall. Kelowna-based Stretch Construction is hoping to build a six-storey rental-only apartment building on the property. The single-family home on the property has been demolished, and the property is currently vacant.
The current developer never purchased the lot at 160 Leathead, and it remains owned by the city.
