January 4th - 2005

Merv's Column: Whose best interest?

Should a buyer's agent disclose an obvious sloping floor to her client and suggest a home inspection?

Should a buyer's agent disclose an obvious sloping floor to her client and suggest a home inspection? Consider the comments of the judge in the following case where a REALTOR failed in her duties to her client:

"I summarize my findings in relation to (the REALTOR). She was the plaintiff's agent and in that capacity owed to (the buyers) a standard of reasonable care and competence and a fiduciary obligation, both of which she failed to discharge. In particular, she made no inquiry about defects in the home and failed to notice the readily observable floor slope on the inspection visit. When the floor slope was discussed, at the time when the offers were presented ... she failed to advise her clients of the existence and potential significance of this defect in the house.

She failed to recommend a building inspection and the inclusion in the offer or in the signed back offer of an inspection condition. She failed to advise (the buyers) that the vendors had preferred their offer over a full price offer in part at least because they were not requiring an inspection. I find that (the REALTOR) wished this deal to be completed for her own financial benefit and was prepared to have her clients, unsophisticated first time home buyers, take the risk of purchasing a potentially defective house. She let her clients down badly. As noted previously, I find that (the buyers) would have arranged an inspection if (the REALTOR) had carried out her duty in the circumstances to recommend the inclusion of an inspection condition in the offer accompanied by an explanation of the potential connection between the floor slope and possible foundation damage."

Wood v Hungerford 2004 ONSC 12473

MERV'S COMMENTS
Neither the sellers nor the listing REALTOR were held liable in this case. The buyer's agent also noted on the offer that she was representing the seller ... "It's just disclosing to the vendors…the ones paying the commission." The judge found that, despite what the offer said, her conduct made her the buyer's agent. Walk like a duck... quack like a duck....

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