April 5th - 2006

LEGALBEAT: Building lot it’s not

The Loggerhead Shrike is a small bird that is an 'endangered' species protected under Ontario's Endangered Species Act.

The Loggerhead Shrike is a small bird that is an 'endangered' species protected under Ontario's Endangered Species Act. Part of the lands involved in this case was identified by the Ontario Ministry of Natural Resources (MNR) as a nesting ground for the shrike.

The buyers bought vacant rural land of about 130 acres. About 84 acres in the northern portion is zoned 'rural' and the southerly part has a creek, a CPR line, and swampy areas and is zoned 'environmentally protected'. The REALTOR who had the listing also represented the buyers as a dual agent. That fact was confirmed in the offer.

The listing and advertisements showed the property as a building site on the northwest part of the property. The buyers paid $34,000 for the property and closed the transaction without any enquiries about obtaining a building permit. They later talked to a municipal building official about their plans and were contacted by a MNR biologist who mentioned an endangered bird. Discussions confirmed that the sellers knew about the Shrike and that the MNR would oppose any building permit within a 400m "protected zone."

After an initial denial, the REALTOR acknowledged that he had known about the Shrike at the time of the listing and that he had made a deliberate decision not to inform the buyers about the presence of the shrike because he did not consider it “important enough.”

The judge decided that the undisclosed information was a latent defect in the condition of the property and was also a negligent misrepresentation by the REALTOR.

Hennessey v Russell 2005 CANLII 22150

MERV'S COMMENTS
The buyers won – but then didn't win much. They did not have any evidence of market value. The REALTOR's appraiser gave evidence that the difference in property value between the purchase price of $34,000 and the actual value of the property of $33,000 was only $1,000. The judge ordered the REALTOR to pay that amount plus some minor consequential damages. Be sure your listing is a building lot and not just pasture land.

For another "Shrike" story, read pages 10-11 of CREA's pamphlet, “Don't Take Property Rights for Granted.”

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