Number 469, April 2014
WHEN SHOULD A BUYER AGENT MEASURE THE PROPERTY?
Must a buyer’s agent verify area measurements? A recent Saskatchewan case illustrates the approach typically taken by the courts and the regulatory authorities.
In Hack v. Rusnak the first-time buyers were a twenty-something couple looking for a first home in a hot market.1 In British Columbia terms, this was a limited dual agency situation; the same brokerage represented the sellers and buyers. Relying on the listing licensee’s information, the buyers’ agent told them that the house was 868 square feet. When later the buyers listed the house for re-sale, they discovered for the first time that it was only 672 square feet and sued the brokerage and its licensees.
The listing licensee never testified at trial, so we do not know how she obtained the 868 square foot figure. At the time, the buyers lived in the 900 square foot home of a relative and wanted a house the same size or bigger, up to 1000 square feet.
In June 2008, the buyers’ agent first showed the house to the buyers. The buyers’ agent apparently had in hand the listing licensee’s data input form, which showed 868 square feet. The buyers’ agent told them that the house felt small to her. To cross-check, the buyers’ agent measured some of the interior rooms, but this did not reveal the overall problem. The buyers did not ask their agent to measure the house; nor did she recommend it.
The buyers’ agent warned them to get an inspection, but apparently said nothing about verifying the square footage. She prepared their offer, subject to inspection and to financing. After some negotiation, the parties entered a contract for the sale of the house for $120,000. One of the buyers attended the inspection but said he did not measure the house himself, because he relied on the real estate agents.
The court found the listing licensee liable for negligent misrepresentation, but dismissed the claim against the buyers’ agent. The buyers claimed that a buyer’s agent must always measure the property, but the court disagreed.
The court found there is no absolute requirement for a buyer’s agent to re-measure every property that they show to the buyer. Rather, in each case, the question is whether the buyer’s agent took reasonable steps to discover facts about the property. Here, there was nothing to suggest that the area figure was critical to the buyers, and no obvious clue suggesting a measurement problem.
The Real Estate Council of British Columbia says that a licensee must act in the best interests of his or her client2 and must, “use reasonable efforts to discover relevant facts respecting any real estate that the client is considering acquiring.”3
According to the Council,
“It is not sufficient for a buyer’s agent to rely on representations regarding room measurements, if, for example, a buyer has indicated that a room must be of a certain size to accommodate the buyer’s furniture. Similarly, for all matters of significance to a buyer, the buyer’s agent should either confirm the information or advise the buyer, in writing, to obtain professional advice.”4
Where an area shortage is alleged, the question is whether in the circumstances it would have been reasonable for the buyer’s agent to verify the measurements. If a buyer makes plain that a property’s size is critical, the buyer’s agent should recommend verifying the measurements and, where appropriate, make the buyer’s offer subject to verifying the area. Alternatively, if something suggests a problem with the area information, the buyer’s agent should take the same steps. If the buyer’s agent does not plan to personally re-measure the property, or to oversee a qualified person to do it, the licensee should obtain the client’s agreement in writing and strongly recommend that the buyer verify the measurement.
| ||1. ||Hack v. Rusnak, 2013 SKPC 128. |
| ||2. ||Real Estate Council of British Columbia Rules, Section 3-3 (a), www.recbc.ca/licensee/rules.html#section3-3. |
| ||3. ||Real Estate Council of British Columbia Rules, Section 3-3 (h), www.recbc.ca/licensee/rules.html#section3-3. |
| ||4. ||Real Estate Council of British Columbia, “Obligations of a Buyer’s Agent”, online: (2014) Trading Services, 3(b), Professional Standards Manual, www.recbc.ca/psm_section/acting-for-buyers. See also the REALTOR® Code, Canadian Real Estate Association, “The REALTOR® Code”, www.crea.ca/code. |
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