Real Estate Tip #1: Never Assume Anything

I often advise my clients and their agents to never assume that anything in an MLS Listing is accurate. There is a disclaimer on the bottom of every listing to the effect that the information contained therein is believed to be accurate but not guaranteed.

In many cases, the information is not accurate and as much of it (i.e. size, condition, age, views, GST status etc.) is NOT replicated in the Offer to Purchase, the buyer can seldom rely on it in a law suit when he finds out that the information was wrong after moving into the property (see para. 18 of the standard Contract of Purchase and Sale which purports to exclude all warranties, representations etc. not included in the contract).

The next step for the buyer is usually to sue his realtor for not pointing that out or writing an offer to incorporate the relevant information.

Can that be avoided? Yes. Don’t assume that the listing is accurate. Personally check out any information which is important to the buyer.

In the recent BC Supreme Court case of Laidar Holdings Ltd. v. Lindt & Sprungli (Canada) Inc., 2018 BCSC 66, assumptions were again at the crux of this fairly complicated law suit which resulted in a judgment of almost 500 paragraphs.

A commercial tenant leased some space in Vancouver without verifying that the zoning was appropriate for its particular intended usage.

Its real estate brokerage (in Toronto) wrote the offer up “assuming” that his Vancouver realtor had checked the zoning. The Vancouver realtor “assumed” that the Offer to Lease would contain a provision for the tenant to verify the zoning (it did not). The tenant’s lawyer “assumed” that realtors had already dealt with the zoning issue (there was no indication that the tenant’s lawyer had input into drafting the Offer to Lease).

The tenant signed the lease and later found out that the city of Vancouver would not permit its intended retail space usage.

The tenant then walked away from the lease and was sued by the landlord. The tenant counterclaimed that the lease was invalid and it also sued the realtors as well for not verifying the zoning in advance.

The tenant was held liable for breaching the lease and its Ontario real estate brokerage was held liable for 70% of the tenant’s claim against it (30% was held to be the tenant’s own responsibility).

Zoning is an important consideration in ANY purchase of real estate (particularly commercial) and it is fairly easy to ascertain in advance of making an offer OR it can be included in an offer as a “subject condition” to be removed by the buyer along with other items of due diligence.

The Moral of the Story: Don’t make assumptions regarding real estate matters. There is too much money on the line.

Disclaimer:  The foregoing is for information purposes only and not intended as legal advice to the reader.  Always consult with an experienced real estate lawyer when modifying the standard real estate contract in use in BC. In addition statutory law as well as case law may change from time to time which could render this analysis inaccurate in the future. 

(C) 2018 Pazder Law Corporation 

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