In a recent case, an Ontario Realtor acted for an inexperienced first-time buyer AND the seller. Relying on information provided by the seller and a previous listing 12 years ago, the Realtor told the buyer that the home was 2,100 square feet. He did not measure the home.
The buyer visited the home twice before making an offer and was told by the seller that the home was 2,000 square feet. The buyer was enthusiastic about the home and ready to close until the property's mortgage appraisal indicated the home was actually 1,450 square feet.
The buyer refused to close and sued the Realtor and the seller.
The court found the seller and the Realtor's misrepresentation concerning the home's size was material to the buyer's decision to purchase. The discrepancy between the negligently communicated size of the home and the actual size was substantial.
Result: The buyer got to cancel the deal, and his deposit was returned. Interestingly, the buyer did not claim other damages against the Realtor or seller.
Lessons learned (and I'm pretty sure all of you know this):
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Be very careful when acting for the buyer and seller. There will almost always be a conflict or situation that prevents you from doing the best job you could do if you were acting for only one party. Protect yourself.
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Size matters. This was an Ontario case, and on a quick look, Ontario doesn't seem to have, as Alberta does, a required Residential Measurement Standard (RMS). Listing or selling, if a measurement is being done, always measure according to the RMS standards. Be very clear on measurements. Protect yourself.
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Part of the judge's decision paid attention to the inexperience and age of the buyer. Spend more effort on young, inexperienced buyers and back up what you've told them. Protect yourself.
Cheers,
Barry
