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Dual Agency, Encroachments, and Cabins, Oh My!

cottage

What happens when a realtor misrepresents a significant characteristic of a property they are selling?

Check out this 2014 Saskatchewan decision at: http://canlii.ca/t/g34p8

A Realtor negligently and fraudulently misrepresents the lots size to the purchasers that he is also acting for, and damages result.  It didn’t help that he originally owned and developed the space, with some strong evidence supporting the fact that he actually knew the dimensions of the lot.

The case provides some good commentary at paragraphs 69 to 77 on what the expected standard of conduct is of Realtors, including the ability for purchasers to rely on those assertions presented as fact (like lot size in this case).

In this case, the realtor’s fraudulent misrepresentations eliminated the protection of clause in their contract for purchase and sale which stated that there was no other agreements about the size of the lot.  While the judge would have allowed the protection if limited to negligent misrepresentations, the fraudulent characteristic of the statement voided the protection. Accordingly, they were deemed contributorily negligent, and were jointly and severally liable for the whole damage award.

In this case, the damage assessment was quite elaborate as they went through a few options on how to remedy the problem.  In the end, the total damages were $33,362 on a $113,000 purchase, and the Realtor and his brokerage were apportioned half, while the landowner apportioned the other half. 

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