Legally Speaking - July 2012 (455)
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Legally Speaking (455, July 2012)


Number 455, July 2012


Jennifer Clee It has been customary for licensees to rely upon BC Assessment and MLXchange for the assessed value of properties offered for sale. A recent decision of the BC Supreme Court1 illustrates the danger of licensees relying upon that information without ensuring that the information is current, particularly where the information was generated prior to the expiration of the assessment appeal period.

The case involved the purchase of an East Vancouver condominium in June 2006. The buyers knew the property was a "leaky condo" and purchased it on speculation. The buyers paid $154,000 for the property, $92,000 for repairs and ultimately sold the property for $415,000. The buyers sued the seller's representative and her brokerage for failing to provide accurate property information. The buyers alleged that the seller's agent was negligent in failing to disclose the existence of a 1999 engineering report dealing with water ingress and the significant cost of repairs.

The buyers also claimed that the seller's representative negligently misrepresented the assessed value of the property as $216,000 when it had been reassessed at $83,700. The buyers claimed that the misinformation provided to them by the seller's representative influenced the price they were willing to pay for the property, with the result that they overpaid by $104,000. The buyers argued that the property was only worth $50,000 when they bought it.

The seller's representative (who offered no agency to the buyers) had agreed to provide the buyers with the strata documents normally provided, including the previous two years of strata meeting minutes, engineering reports and the tax assessment information. The seller's representative provided the buyers with a copy of tax information obtained from MLXchange, which indicated the property's assessed value as $216,000. Unbeknownst to the seller's representative, the sellers had appealed the assessment prior to listing the property which resulted in the assessed value of the property being reduced from $216,000 to $83,700. The information on MLXchange had not been updated.

The seller's representative never confirmed the assessment information through BC Assessment, or asked the seller whether they had appealed the property's assessment and the results of that appeal. The court held a reasonable and prudent licensee would have done so, particularly when the buyers had asked for confirmation of the assessed value. The court took into consideration the fact that the initial property assessment issued in January of each year is not considered an "authenticated" assessment, and does not become so until the assessment appeal period has expired.

The court commented that even if the industry practice of Vancouver licensees was not to verify information provided by MLXchange, that practice is not acceptable when a buyer wishes to have the assessed value confirmed. The court consequently found the seller's representative negligent in failing to verify the assessment information with the seller or BC Assessment. The court also found the seller's representative negligent in failing to obtain and provide the buyers with a copy of the 1999 engineering report when she had undertaken to do so. Notwithstanding the court's findings, the buyers' claim against the selling representative was dismissed due to the buyers' inability to prove damage.

Licensees using MLXchange should be aware that there may be a delay in MLXchange receiving, and thus publishing, updated assessment information from BC Assessment. Accordingly, where a buyer wishes to have the assessed value confirmed, licensees seeking to minimize their risk should verify assessment information from MLXchange with BC Assessment, or directly with the seller, to establish whether an appeal has been taken and the result of that appeal.

Jennifer A. Clee
B.A., LL.B.

  1. Li v. Ouyang et al, 2012 BCSC 48.
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