Legally Speaking - May 2010 (438)
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Legally Speaking (438, May 2010)

 

Number 438, May 2010

Being Sued is No Fun!

We all know that being sued for allegedly failing to fulfill legal and/or professional responsibilities can be traumatic, but it can also be time consuming and consequently, expensive. A recent decision of our Provincial Court illustrates how legal proceedings involving relatively straightforward legal issues can morph into protracted and strenuous battles.1

The case against a REALTOR® involved an allegation of misrepresentation regarding the square footage of a home. The Claimant, a former REALTOR® and present employee of the BC Assessment Authority, sued the defendant listing REALTOR® for misrepresenting the square footage of a home as being 2669 square feet when in fact, by his calculations, it was 2274 square feet.

The discrepancy in the measurements arose as a result of the listing REALTOR® including an area of 477 square feet for the unfinished loft over the garage in the “Other” section of the MLS® Residential Data Input Form, which was then included in the computation of the square footage of the property by the MLS® interface program. Including the “Other” area resulted in the MLS® printout representing total square footage as 1799 square feet, or less than the Claimant’s own measurement of 2274 square feet which included the finished basement and the main and upper area of the home, for liveable square footage. However, the Court found negligence on the part of the listing REALTOR® for including the area of the unfinished loft on the Residential Data Input Form.

Despite that finding, to establish liability against the listing REALTOR® the Claimant had to overcome three other legal hurdles. To succeed with his claim, it was incumbent upon the Claimant to establish a duty of care owed by the listing REALTOR®, reasonable reliance by him on the alleged misrepresentation and damage suffered as a result of his reliance on the misrepresentation or as a result of the listing REALTOR®'S negligence. The Claimant failed to overcome these three hurdles and the claim against the REALTOR® was dismissed. Interestingly, the Court applied the doctrine of caveat emptor, finding that the “measuring of a home to ascertain its square footage would be patent and, as such, fall on the purchaser’s obligation during inspection even if the defect (misrepresentation as to size) might not be observable by casual inspection and may require more diligent investigation.”2

The matter may have been settled at an early stage if the REALTOR® had been prepared to make a substantial settlement offer to the Claimant, who sought $21,675 from the REALTOR®, close to the maximum claimable under the monetary jurisdiction of the court. As it was apparent from the Claimant’s own evidence and that of his witnesses’, and the applicable case law, that his case was unlikely to succeed, no monetary offer was made. When no settlement offer was forthcoming, the Claimant advanced a complaint against the listing REALTOR® and brokerage to the Real Estate Council, which dismissed the complaint.

However, despite the outcome of the trial and the relief it visited upon the listing REALTOR®, it was not without a hefty price. The trial took six days to be heard, spread over a period of 14 months. In addition to the six days of valuable time spent sitting in Court, the listing REALTOR® spent hours in preparation and that, in addition to testifying in court, resulted in an emotional toll.

The lesson to be learned? While there may be more than one standard for measuring properties in British Columbia,3 be consistent with the practice in your market, measure all properties you list and double check the measurements to ensure their accuracy and lastly, ensure the information published on MLS® is accurate. Taking these steps will assist you in avoiding the misery and cost, both in time and money, associated with lawsuits and Council complaints.

Jennifer Clee
Real Estate Errors and Omissions Insurance Corporation
Vancouver, BC

  1. Manarin v. Stelmaschuk et al., Unreported, February 19, 2010, Provincial Court of British Columbia, Action No. 0729048, Prince George Registry.
  2. Ibid., paragraph 172.
  3. Report from Council, February 2006, Vol. 41, No. 4.
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