Last week reader Andy posted here a comment asking for advice regarding unplanned changes to a new apartment. Usually I can’t do much with such comments, as I’m not about to get involved every dispute that comes along. But I thought this comment raised an interesting issue, so here it is:
I have a question relating to the word “reasonable”.
I have recently purchased a new flat. I purchased this particular flat because of the beautiful view from the balcony. The original plan (which I signed) shows the balcony to have a balustrade on two sides of the balcony, therefore allowing a view from two sides of the balcony. Recently I visited my flat, still under construction, and noticed that the contractor has built a full solid concrete wall in place of one of the balustrades. The solid wall blocks out the view from one side of the balcony. The reason for the full concrete wall been built was to give additional support to the flats above. I have read the contract again and found the following clause:
“The extent of the section and any exclusive use area/s shall not differ by more than 10% of the area indicated on the unit plan. The Purchaser shall have no claim against the Seller arising out of reasonable alterations or amendments to the finishes, the drawings or variations or alterations to the plans.”
I am going to see the Seller early next week. I would like to prepare myself with a strong argument for some sort of compensation. I believe this is fair since the wall blocks out the view i.e. the reason I purchased this particular flat.
The contract uses the word “reasonable”. This word is subjective since the variation to the design is reasonable to the Seller and benefits the flat above, however, it is not reasonable to me. Please help me with advice on ways to argue my point as well as any other relevant information?
The moral of this story is that if you’re not careful about how you use the word reasonable, it can be unclear what the appropriate standard is. As Andy notes, use of “reasonable” in that extract from his contract leaves one wondering whether “reasonable” relates to Andy’s concerns regarding aesthetics or the developer’s concerns regarding structural integrity.
If I had been in Andy’s shoes when he reviewed the contract before signing it, I might have negotiated to replace the second sentence of that extract with a provision that prevents the developer from making, without Andy’s prior written consent, any changes that would reduce the market value of the apartment or adversely affect the owner’s enjoyment of the apartment. That restriction could conceivably have been subject to a qualification relating to significance, but I’d have made sure to use the defined term Significant (see MSCD 9.19). Using instead the word material would have created confusion, as material is both vague and ambiguous (see this 2007 post). Even if it had been made clear, by using the defined term Material, that material entails a very high degree of significance, that standard would have given the developer too much leeway.
I’m sure that there are standard ways of addressing this sort of issue in real-estate contracts. Please excuse this interloper.