The Vendor, in a recent case, told the Purchaser prior to their
signing the offer that there were "no water problems"
with respect to the house being sold. In fact, the basement
had two (2) sump pumps. After the closing, serious water problems
were discovered and the Purchaser sued the Vendor.
The
Purchaser said that there was fraud on the part of the Vendor.
The court, on Appeal, disagreed. The Appeals Court felt that
at most there was an unfortunate misunderstanding as what
amounts to a "water problem". The representation
of "no water problems" was not defined by anyone,
and because of that the Purchasers lost the case.
The
moral of the story is that if you are acting for a Purchaser
(Buyer Agent - high fiduciary duties!) and the Vendor indicates
that there are no water problems, you should
| 1. |
Define
what that phrase means and insert that Warranty into the
Agreement of Purchase and Sale, and |
| 2. |
Insert an Inspection Clause - even if your client does
not want an Inspection (they can after all cross it out),
it proves that you did the responsible thing by suggesting
it, or |
| 3. |
E-mail us or Call the Korman & Associates AGENT
SUPPORT HOTLINE - 905 602 6515 and ASK US. The lawyers
and staff at Korman & Associates are easy to reach and
they're happy to help you! |
Had the Agent in the situation described above followed the
advice in this Practice Tip, it is likely that the lengthy
and costly (after all, it did go to Appeal) legal battle could
have been avoided.
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