June 1st - 2011

LEGAL BEAT: Clients can and do make all kinds of claims after a loss

The buyer sued the sellers, the home inspector and her REALTOR® after water infiltration and basement flooding occurred in her Saskatchewan home.

The buyer sued the sellers, the home inspector and her REALTOR® after water infiltration and basement flooding occurred in her Saskatchewan home.

One claim against the REALTOR® was for negligent misrepresentation. However, the judge found that, although there was a duty of care as a buyer’s agent, the REALTOR® merely passed on information from the listing agent and that this was made clear to the buyer. The listing agent had said that there had been no water problems for a significant period of time and none since remedial steps had been taken, as identified in the PCDS, the equivalent of an Ontario SPIS (Seller Property Information Statement) or property disclosure statement. None of the statements were untrue, inaccurate or misleading.

The buyer then claimed that her REALTOR® was negligent. No evidence was introduced to suggest that the REALTOR® was required to investigate independently each assertion by the listing agent or the seller on the disclosure statement. The judge ruled that no proof had been introduced that demonstrated that the REALTOR® fell short of the standard of care in these circumstances.

The judge then noted that the buyer did not rely exclusively on statements made by the REALTOR® because the buyer also insisted on a home inspection. As noted in earlier cases, "A purchaser who employs the services of an inspector cannot be said to have relied solely on the representations of the vendor."

The buyer then argued that her REALTOR® provided her with a guarantee that she would have no problems with water in the future. The judge did not believe that an experienced REALTOR® would say such a thing and would in fact grasp the folly of making such a statement.

Following this, the buyer then claimed that the REALTOR® had breached her fiduciary duties. However, the judge found that the salesperson had been diligent in answering the buyer’s inquiries, made repeated requests to the listing agent, reviewed all pertinent documents with the buyer, and made appropriate recommendations to provide the buyer with as much protection as possible. The judge ruled that the REALTOR® had acted in a professional way throughout the transaction. The buyer lost her claims against her REALTOR®.

Hamel v Junek 2009 SKQB 274

MERV’S COMMENTS
Clients can and do make all kinds of alternative claims when they have a loss. This wise REALTOR® was successful because the judge believed she had demonstrated that she had taken all of the necessary steps to protect her buyer and explained everything to her client. When you’re handling a real estate transaction, be sure to take the time to answer your buyers’ questions, relay their requests to listing agents, and go through all documents thoroughly so that your buyers are fully informed.

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