June 24th - 2017

Legal Beat: Zoning confusion leads to lawsuit

The township told the buyer that a rural property was safe to build on. A lawsuit ensued when the buyer later learned that a building permit was withheld because the land was located on a “no-build” buffer zone near a former dump site.

Legal beat

The township told the buyer that a rural property was safe to build on. A lawsuit ensued when the buyer later learned that a building permit was withheld because the land was located on a “no-build” buffer zone near a former dump site.

by Merv Burgard

Legal beat

The seller in this case worked with a real estate salesperson, “Harriet”, to list a rural property for sale. That same owner told Harriet that the property was zoned residential. Harriet posted the listing on the MLS® system. The listing stated that the lot was “suitable for building your dream home” and zoned residential.

After that listing expired and no sale occurred, that seller chose to work with another brokerage. The second brokerage listed the property using similar language. By this time, Harriet was working with a buyer. In her capacity as the buyer’s representative, Harriet checked with the township and told the buyer that the road into the property had a dump situated on it years ago which could not be built on for another five years, but the township had advised her that the property was safe to build on.

The buyer closed his deal and spent $18,000 in preparation for his new home.

He was then told that a building permit would not be granted because the property was located within a “no-build” buffer zone which extended 500 metres around a former dump/waste site. He threatened to sue the township. Instead, the township bought the lot for a price that was $2,000 more than the buyer had paid. That was based on a claim for similar misrepresentations made to the buyer’s wife by township staff before and after the purchase.

The buyer then sued his representative, Harriet, for the expenses that he fruitlessly incurred to ready the property in order to build his home. The judge found that Harriet did not act negligently in making statements to the effect that the property was suitable as a building lot. Her broker of record testified that it is not standard practice for a buyer’s representative to obtain a zoning certificate to confirm zoning. There was no evidence that Harriet failed to meet the usual or customary standards of a purchaser’s agent with respect to her efforts to verify the accuracy of the seller’s information.

Mervin Burgard Q.C.

The judge also found that by making his own enquiries of the township, the buyer chose not to rely on Harriet’s statements or the MLS® sheet.

Drolet v ReMax Riverview Realty 2016 CanLII 47265 (ON SCSM)

MERV’S COMMENTS

Before completing an Agreement of Purchase and Sale (APS), send your buyers to the local municipal offices so that they can confirm their plans. Consider attaching a conditional clause to the APS such as OREA’s Build/Const-1.

Merv Burgard, QC

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