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REAL ESTATE AGENTS AND BROKERS - Agent’s duties to principal - Contractual and tort duties

Friday, January 15, 2021 @ 6:16 AM  


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Appeal by the defendants from a trial judgment granting the respondent purchaser rescission of an agreement of purchase and sale of a residential property and ordering the return of the deposit. The appellant realtors acted for the respondent, an inexperienced first-time buyer, and the vendor. The appellants told the respondent that the home was 2,100 square feet. He relied on information provided by the vendor and information from a previous listing 12 years ago. The appellants did not measure the home. The respondent visited the home twice before making an offer and was told by the vendor that the home was 2,000 square feet. The mortgage appraisal of the properly indicated the home was 1,450 square feet. The trial judge found the respondent’s inspection of the home did not determine his expectations but that he reasonably relied on the appellants’ representations as to the size of the property.

HELD: Appeal dismissed. The trial judge did not err by concluding that the appellants’ misrepresentation concerning the size of the home was material to the respondent’s decision to purchase. He was told by the appellants and the vendor that the property was 2000 or more square feet. The discrepancy between the negligently communicated size of the home and the actual size was substantial. The respondent’s reliance on the representations about the size of the home was supported by the fact that he remained ready to close the purchase until the moment he discovered, through the appraisal of the property related to his mortgage application, that its actual size was only 1,450 square feet. The trial judge did not err by referring to the respondent’s young age and inexperience in home buying.

Issa v. Wilson, [2020] O.J. No. 5210, Ontario Court of Appeal, J.C. MacPherson, B. Zarnett and M. Jamal JJ.A., November 30, 2020. Digest No. TLD-January112021009