I have been asked to e-mail some more info about the Ontario Court of Appeal decision that found a realtor liable for the way he dealt with a property disclosure statement and regarding a home inspection condition.

Most importantly, it is the way the Court of Appeal came to their decision that impacts you as realtors. The decision can have a much broader scope than just affecting property disclosure statements and home inspection conditions. The Court decision reads as if it was intended to send a message to the industry that a new higher standard will be expected by the Courts.

Remember in that case the Trial Judge held that the realtor was not liable, and the Trial Judge’s decision is not out of line with previous Court decisions on this type of matter. In overturning the Trial Judge, the Court of Appeal opens up the possibility of realtors being held responsible on real estate transactions in a much more broad way than would have been thought to be the case in the past.

In this case, the seller negligently misrepresented facts about the house. I expect as realtors you all see situations where sellers are careless about representing facts about their house. If they do so in circumstances where a realtor should have suspected that those representations were incorrect, then this case opens up the possibility that the realtor will be found responsible passing on sellers’ representations Without first checking their accuracy.

So what is a realtor to do? I don’t want this to sound trite or “preachy”. But, what follows is the best way I can think of to answer the question:

Firstly, what you should not do is become discouraged. When I mentor young lawyers about their responsibilities, I see them sometimes get overwhelmed to the point that they do not act.

Don’t let that happen to you. Remember that you are in the same boat with other realtors and other service providers and we are all at risk of someone claiming we are responsible for their losses.

The interest of our clients always at the forefront of our decision making. I encourage young lawyers to ask themselves what they would do if their client happened to be their parents. In this case, if the seller had been the realtor’s-parents, would the realtor have made sure the property disclosure
statement was accurate? I think probably she would have. If the buyers had been the realtor’s children, would she have insisted on a home inspection and otherwise taken steps to check the seller’s representations in the property disclosure statement. I think she would have.

What a realtor should do is act as though each client is a close friend or relative. When you do that, sometimes you’ll spend more time and energy on a file than you will be paid for. When that happens we all should have to remember that we are in business for the long run, and by acting in this way we all have clients that keep coming back.

Remember also that because selling real estate is a. complicated matter with potential risks, as this case makes clear. A good realtor is very important to the process, and you should expect to be compensated accordingly. If buying and selling real estate wasn’t complicated and nasty,
realtors wouldn’t be necessary – and lawyers wouldn’t be either.

-Bill Fric

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