October 9th - 2004

Merv's Column “Full basement” not full story

The seller was a municipal planner who bought a home that he knew did not have a full basement.

The seller was a municipal planner who bought a home that he knew did not have a full basement. Some years later he listed the property for sale and the listing showed that it had a full basement. The listing agent said that this usually meant a concrete basement for the entire residence. The exterior skirting was painted like the rest of the foundation, so there was no obvious evidence that it was not concrete. This was considered to be a latent defect.

The seller completed a property disclosure statement which required him to disclose "every material fact about the property to the buyer." He did not mention anything about the basement.

The REALTOR said that the listing information is meant as an enticement and, despite the fact that it cannot be relied upon, the information that it contains should be accurate. The judge decided that the seller was liable for providing inaccurate or misleading information.

The listing had the following disclaimer: "The information contained on this listing form is from sources believed to be reliable. However, it may be incorrect. This information should not be relied upon by a buyer without personal verification. The brokers and agents and members of the ABC Real Estate Board assume no responsibility for its accuracy." However, this is contrary to the requirement of the disclosure statement. In any event, this type of clause may provide protection to REALTORS rather than to sellers.

McIntyre v. Nichols 2004 NSSC 036

MERV'S COMMENTS

Sellers do not need to disclose this type of information. However, once a decision is made to complete a listing or Property Disclosure Form or to answer questions about the property, the information should be full and frank. The judge also referred to earlier cases such as one where the age of the house was given as nine years rather than 19. That was also a negligent representation for which the sellers were liable.

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