As anyone who has purchased or rented property will tell you, reviewing listings is an important way to find out information about properties that are on the market. They contain important information and details about a property and allow you to compare between properties based on price, size, location, etc. A key part of using MLS listings is being able to trust what they say. But what happens when you’ve bought a property and discovered that the listing you relied on contains a mistake?
That is exactly what happened to Salvatore Paglia in the spring of 2012. After purchasing a vacant land that was listed by the listing agent as a “fully serviced lot”, he discovered that it was not electrically serviced. He brought an action against the vendor, real estate agent, and broker and the court awarded him the amount spent to electrically service the lot.
The listing agent was found liable for negligent misrepresentation to the buyer. Pursuant to The REALTOR Code, the listing agent owed a duty of care to prospective buyers to ensure that advertising was accurate and to avoid misrepresentation. In that case, the agent was not told that the lot was fully serviced and did not take steps to ascertain what services were available. The purchaser, who was not represented by an agent reasonably relied on the claim that the lot was fully serviced and suffered damages as a result.
In another case, Krawchuk v Scherbak, the agent who acted for both the vendor and purchaser was found liable for misrepresentation for failing to verify the accuracy of the vendor’s representations or recommend independent inspection before submitting an offer or making the offer conditional on satisfactory inspection.
These cases serve as a reminder to realtors to verify facts and to purchasers that they should, where possible, verify the representations and perform an inspection themselves to avoid problems after closing.
These comments are of a general nature and not intended to provide legal advice as individual situations will differ and should be discussed with a lawyer.