December 6th - 2005

Merv’s Column: Can’t rely on old survey

The buyers relied on a 13 year old survey which did not show that the driveway encroached on the neighbour's property.

The buyers relied on a 13 year old survey which did not show that the driveway encroached on the neighbour's property. After buying the piece of land they found out there was an encroachment and sued the sellers based on a statutory declaration which said that there were no encroachments. However, the sellers had honestly believed that to be true.

The trial judge decided this was an innocent misrepresentation that was not actionable. The appeal judge decided that it was a warranty but that it merged on closing. "A warranty is a term in a contract which does not go to the root of the agreement between the parties but simply expresses some lesser obligation, the failure to perform which can give rise to an action for damages but never to the right to rescind or repudiate the contract ..."

"Merger occurs when two estates coalesce through a vesting in the same person at the same time in the same right ..." Whether that occurs is a matter of "the common intention of the parties". The seller in this case was found not liable.
 

Alves v Bechtel 2004 CANLII 46665 (ONSC)

MERV'S Comments
The judge also said that the buyers could have protected themselves by searches which careful conveyancing required, or by express wording in the deed, or by a warranty or undertaking clearly expressed as surviving the closing. Why not have the survey updated? Or, better still, why not ask for a specific warranty in the offer that survives closing?

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