Office: 165 Pretoria Avenue, Ottawa ON. K1S 1X1
I am regularly surprised at how frequently a land survey is viewed as unnecessary when it could be considered the single most important document in a real estate transaction.
A survey was the focus of a court decision released last month. It all started in April 2017, when Mr. and Mrs. S. listed their home for sale for $649,900. Located in Brampton, the house sits on an irregular lot. The 120-foot-long lot has a frontage of 71.12 feet narrowing to 44.93 feet at the rear.
The MLS listing noted the frontage and depth, but did not disclose the rear measurement. A more detailed document available on the propertyline.ca subscription website disclosed that the property narrows at the back.
At the time of the listing, the real estate market was very active and the owners received eight competing offers.
Mr. and Mrs. A. visited the property with their own agent and submitted a conditional offer to buy the house for $805,000. The owners signed it back at $850,000, removing the conditions, and the buyers agreed.
The frontage and depth were properly filled in on the buyers’ offer — on a Toronto Real Estate Board form that does not include spaces to indicate irregular dimensions. There was no disclosure that the rear measurement was smaller than the front. The offer required the sellers to provide a land survey, but only if one was “available.” The sellers did not have one.
Two mistakes were made at this point. A survey showing the correct size and shape of the lot was, in fact, available online at protectyourboundaries.ca for $298, plus tax. But neither agent checked to see if a survey was available before the offer was prepared.
As well, the agents failed to download an inexpensive copy of the subdivision plan showing the dimensions of all the lots.
Sometime before closing, the buyer obtained a copy of the survey from the city. He later claimed he would never have offered $850,000 had he known about the irregular shape of the property.
The deal did not close. After the real estate market experienced a sharp downturn in the summer of 2017, the owners were only able to sell the property for $746,000.
The owners sued the buyers for damages for breach of contract, and the buyers sued the sellers for the return of their $25,000 deposit, claiming the agreement was rescinded due to a misrepresentation in the size of the lot.
Earlier this year, both parties appeared before Justice James Stribopoulos in Brampton. Each side applied for summary judgment without a trial.
The judge found no evidence of misrepresentation and ruled that the buyers decided to walk away, breaching the contract. Judgment was granted in favour of the sellers for the $114,140 difference between the two sale prices, plus interest, costs and other damages. The $25,000 deposit was to be released and credited against the award.
The lessons from this case: Always describe the lot dimensions accurately in the purchase agreement. And always get a survey.
Bob Aaron is a Toronto real estate lawyer and frequent speaker to groups of home buyers and real estate agents.
He can be reached by email at email@example.com, phone 416-364-9366 or fax 416-364-3818.