June 7th - 2006

LEGALBEAT: Show buyers SPIS

The buyers hired an agent, viewed this rural property and made an offer that was conditional on financing, a home inspection and being satisfied with the "quality and quantity" of water.

The buyers hired an agent, viewed this rural property and made an offer that was conditional on financing, a home inspection and being satisfied with the "quality and quantity" of water. The agent had the water tested and told the buyers that the water was "okay" and tested "zero zero."

However, the sellers had a drilled well that produced salt water and had to have water delivered to a cistern. In their SPIS they had written "well - salt, cistern -3000 gallon." The seller said that she left this information available for buyers, but these buyers said they never saw it. The sellers said they told the buyers, but they disagreed. The judge had to decide credibility issues and found for the buyers.

The agent was held liable for not telling the buyers what had to be done to satisfy the condition and without mentioning that the Department of Health testing did not deal with salty water. That salt water caused serious problems that cost the agent and brokerage $27,000.

Blais v Cook 2005 CanLII 22210 (ONSC)

MERV'S COMMENTS
The judge found that the agent was negligent without proof from other agents as to the usual standard of care and also breached his contractual obligations to the buyers. That latter finding is important in law as it means that there is not a sharing of responsibility as there might be in a negligence finding. In any event the judge did not find that the buyers were liable for the problems.

Agents can be held accountable for failing to protect their clients by informing them of the special risks of a transaction. Warn them. Give them the SPIS.

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