An Ontario real estate agent found a home for a purchaser and drew up the offer conditional on a home inspection. The purchaser made it known to the agent and the home inspector that she was allergic to mould. The agent put in a term that the purchaser could abort the deal if she was not satisfied with the inspection report. The inspector observed no mould and no moisture penetration, but did not include in the report that parging on an exterior wall at the driveway was a major defect.
The purchaser waived the condition and closed and later had an allergic reaction to mould. The purchaser sued the agent, the realty brokerage, the vendor and the home inspector. The trial judge apportioned 50 per cent of the blame to the inspector, 25 per cent to the agent and 25 per cent to the purchaser (contributory negligence).
But the Appeal Court found the trial judge erred in finding the agent liable for not reading the inspector’s report, reviewing it with purchaser and discovering the possibility of moisture from that report. This was not pleaded by purchaser and she called no expert evidence that it was a standard of care for the agent to read the inspector’s report and denote in it possible indicators of moisture. Negligence against the agent was set aside and the inspector was found 100 per cent liable. (Halliwell v. Lazarus, 2012 ONCA 348)
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The British Columbia Supreme Court was asked to rule on the purchase of a condominium unit from the developer. The defendant purchaser, although entering into the agreement with a developer and having received disclosure statements, failed to close. The purchaser said the unit had an individual hot water tank and was not part of a “central hot water system” as indicated in marketing materials.
The court ruled that the fact the developer did not file an amended disclosure statement still allowed the developer to sue, and for a declaration that the Agreements to Purchase were enforceable. The change from a hot water system to individual hot water tanks did not render the information in the Disclosure Statement untrue because it was not a change of a material fact on the basis of affecting the value of the unit, its price or its use.
The judge wrote, “Considering all of the evidence, it is my conclusion that the real reason that the defendants did not complete was because of the admitted change in market conditions. I doubt that the change to have a hot water tank installed had any real bearing on their decisions not to close, other than providing an excuse not to close.” (Bosa Properties [Esprit 2] Inc. v. Kim, 2012 BCSC 1013)
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In the purchase of a residential property, the vendor provided a seller’s statement that the property was not subject to flooding.
When the purchasers viewed the property it was dry. However, one month after closing, rainfall in the backyard accumulated water from a couple of inches to a foot deep, rendering a large part unusable. It was obvious the vendor knew of this problem since his neighbours also had a similar issue.
The vendor tried “unsuccessfully” to limit the statement to the house and argued water pooled but did not flood the backyard.
The court (affirmed by the Court of Appeal) found the vendor’s statement was a negligent or fraudulent misrepresentation, which was relied upon by the buyer. Court ruled the flooding was a latent defect (when property was viewed). Damages were awarded. (Costa v. Wimalasekera, 2012 ONSC 6056)
Full case summaries are available at www.canlii.org.
Donald Lapowich, Q.C. is a partner at the law firm of Koskie, Minsky in Toronto, where he practices civil litigation, with a particular emphasis on real estate litigation and mediation, acting for builders, real estate agents and lawyers.
