August 8th - 2008

LEGALBEAT: No parking: both agents found negligent

The seller, buyer's lawyer, buyer's agent and seller's agent were all guilty of negligence in failing to properly deal with property measurements and parking requirements.

The seller, buyer's lawyer, buyer's agent and seller's agent were all guilty of negligence in failing to properly deal with property measurements and parking requirements. The judge accepted the expert opinion provided by Barry Lebow regarding the duty owed by the real estate agents which was summarized as follows:
 
"Purchaser's agent: (a) He should have made independent inquiries to confirm that the property could be used as a dental office. It was not sufficient for him to have simply relied on the representations of the vendor's agent; (b) His review of the Listing Agreement, including the absence of any parking information and the difference in the surveys should have led him to make further inquiries, at least at City Hall; (c) As the person drafting the Agreement of Purchase and Sale, a reference to adequate parking should have been included as a condition, representation or warranty.
 
Selling Agent: (a) With the two appraisals in hand, including the difference in frontage along Oxford St., further investigation and inquiries with the owner and at City Hall were expected to confirm the actual lot size; (b) A review of the available survey data should have led a reasonable agent to conclude that the west side parking lot was not "on-site,"; (c) That conclusion should have led to further investigations, including a review of relevant City Hall files."

Davenport v Stakiw 2007 CanLII 6911

MERV'S COMMENTS
As the judge noted, liability will arise for erroneous advice and opinions by a REALTOR®, if based on uninformed positions, or if the agent or broker has failed to undertake any, or sufficient, research, investigation or consultation. Article IV of the Standards of Business Practice of the Canadian Real Estate Association provides that: “The member has an obligation to discover facts pertaining to every property for which the member accepts an agency which a reasonably prudent REALTOR® would discover in order to fulfill the obligation, to avoid error, misrepresentation or concealment of pertinent facts.”
 
That is especially true in commercial properties when parking and local/zoning requirements are critical to the use of the property.

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