It’s time to debunk some of the myths surrounding the form, many of them promoted by OREA and its industry apologists. Here they are:
While refusing to sign an SPIS is never an absolute shield from litigation, signing the form exponentially raises the chances of being sued.
OREA’s website contains an online education course entitled SPIS: Don’t Leave the Office Without It. Given that the real estate trade association is heavily promoting the form, I question why so few agents are following its advice.
Raymond Diep is a licensed real estate broker and articling law student. He tells me that in his experience fewer than 5 per cent of Toronto listings offer an SPIS, and he has actually never seen one in a live deal.
My conclusion is either that virtually all agents are ignoring their association’s advice, or their clients are ignoring the advice of their agents, or almost everybody is ignoring OREA. But it is clear to me, observing the marketplace, that the industry associations across Canada that promote forms like the SPIS are flogging a dead horse and are clearly at odds with their members.
Despite the almost universal boycott of the SPIS, some sellers and their agents still use it: they are the ones who seem to be the source of the never-ending stream of new SPIS court decisions.
In April 2009, John Shen bought a house in Richmond Hill from Francesca Maiolo for $1.869 million. Shen’s home inspector produced a thorough report of the building’s components.
Maiolo signed an SPIS form in which she responded in the negative to the question, “Are you aware of any moisture and/or water problems?”
The inspection report pointed to an “excessive moisture level” in the basement. Typically, this would relieve the seller from any responsibility for a misstatement on the form.
But deputy judge Stanley Baker ruled that the seller had to share responsibility for damages, due to her misleading statement. “To ignore it would be to condone reckless dissemination of untruths, a notion repugnant to the ethos of honourable dealings in contract and quite unacceptable in law,” he wrote.
He ordered the seller to pay 30 per cent of the buyer’s damages of $5,330.
For more columns and court cases on the SPIS, including a review of Ontario court cases from 1997 to 2010, click on http://aaron.ca/search-star.cfm, and enter SPIS or Seller Property Information Statement.
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.
Visit the Toronto Star column archives at http://aaron.ca/toronto-star-columns.cfm for articles on this and other topics.
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