In a property deal, phrases like ‘to be verified’ can be costly — over $100K in this case


thestar.com
Bob Aaron
Bob Aaron bob@aaron.ca

Posted On: Friday, January 4, 2019
The Ontario Court of Appeal has reversed a lower court’s decision allowing the seller of a Toronto property to keep the $100,000 deposit of a buyer who refused to close the deal.

Nancy Ann Pringle owned a detached, two-storey house on a corner lot on Alder Rd. in East York, and listed it for sale at $1,288,888.

When Pringle’s real estate agent, Steve Kabbabeh, was told she did not have a property survey to provide the mandatory lot dimensions for the Multiple Listing database, Kabbabeh accessed the Municipal Property Assessment Corporation’s (MPAC) database.

The database — which is often incomplete and unreliable — indicated incorrectly that the property had a frontage of 87.64 feet and a depth of 0 feet.

Kabbabeh then measured the depth of the lot with a tape measure in order to provide the needed measurement.

The measurements were ultimately entered into the MLS as 87.64 by 100 feet. The listing also noted that the property was “Irreg Corner Lot — Depths To Be Verified.”

Daryoush Hosseinzadeh submitted an offer to buy the property, which was described as having a frontage of 87.64 feet more or less by a depth of 100 feet more or less. The offer was amended to indicate that the 100-foot dimension was “to be verified.” (As it turned out, both dimensions were wrong.)

The parties agreed on a price of $1,233,000 and Hosseinzadeh submitted a deposit of $100,000.

Later, after discovering that the actual dimensions were too small to divide the lot for two houses, he refused to close. The property was later resold.

The buyer and seller then headed off to court in a fight over the $100,000 deposit. The court ruled that the seller could keep the deposit and that the buyer was the author of his own misfortune. The words “to be verified” meant that the buyer accepted the responsibility to satisfy himself as to the accuracy of the dimensions.

The buyer appealed to a three-judge panel of the Court of Appeal which released its decision last month.

In reversing the original decision, the court ruled that the words “to be verified” only meant that the depth dimension of 100 feet, which all parties knew had not been taken from a survey, had to be verified. As well, the actual size exceeded the “more or less” flexibility in the wording of the offer.

The buyer was not obliged to verify the dimensions before the agreement was signed and accepted. In addition, the vendor was not representing lot size in the offer.

This case would never have happened if the proper dimensions had been verified from the deed, a land survey available online or the plan of subdivision. It is also a lesson that only an Ontario land surveyor is qualified to measure dimensions.

The seller had to refund the $100,000 deposit, and she was ordered to pay $37,000 in costs to the buyer.

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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 bob@aaron.ca, phone 416-364-9366 or fax 416-364-3818.

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