How Far Must Agents Go to Verify Listing Information?

Posted on: Wednesday, January 21st, 2015

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A review of RECO discipline decisions would lead one to believe there is no limit to how much diligence is expected of agents to satisfy their professional obligations.

A decision from last year against a Barrie Agent brings this issue to the forefront and should be reviewed and understood by all agents to avoid against similar discipline.

In the Decision in question a Barrie Agent included in the MLS Listing Information and advertisements that the property backed onto Environmentally Protected Lands. The agent relied on the following to make that representation:
• Previous listing;
• Seller’s statements;
• Telephone communications with staff at the City. The evidence around this confirmation was vague and no one from the City gave evidence. The actual question posed was not available.

The buyer was retired and made it known that he was specifically looking for a property which had no homes in the backyard and/or backed onto parkland, woods or green space for privacy and quiet. He relied upon the MLS listing promoting the EP land. The Photo Feature Sheet provided when the property was viewed also included the statement “Backing onto EP Land – and Overlooking the EP Land and Trees”. It was noted that the offer did not contain a condition placing on onus on the buyer to verify or validate the zoning claims.

Upon moving in the neighbours were the first to inform the buyer that the property did not back onto EP lands. The buyer gave evidence that believed the buyer considered this claim in his offer and paid a premium for the EP lands.
The evidence given by a planner at the RECO hearing was that the property immediately behind the subject property was not and has never been zoned EP land. He also advised the panel that the public can request conformation on the zoning and land use by visiting or calling the planning office, although sometimes a fee is charged. The land behind the property has three zoning designations, being: agricultural, residential and EP; however, the EP lands are not adjacent to the subject property.

The Agent was found to have not properly disclosed materials facts (s.21.2), did not use best efforts to prevent a misrepresentation, (s.38) and therefore engaged in unprofessional conduct (S.39).
It is interesting to note that the Buyer’s agent was not found liable in this transaction. He gave evidence that the buyer located this property on his own by way of the internet, and the buyer did rely upon the representation that it backed onto EP land. This agent also stated that he did feel the buyer paid more based on the EP claim. I have noted that this appears to have been brought solely against the Seller’s Agent. If the Buyer’s Agent had been named I expect the outcome would have been different. It was in fact the Buyer’s Agent who was aware that the Buyer was looking specifically for a private backyard, and it was this agent that explained what EP land and zoning meant. I would have expected the Buyer’s Agent to have been equally as liable to have not verified the zoning knowing this was a material fact that was important to his client, and especially given that this agent had provided evidence to the panel that he believed his client paid a premium for this property with the EP lands behind it.

The Agent maintained that she had no reason to believe this information not to be true at the time and that she did nothing wrong. However, as a result of this incident she has changed her policies.
RECO concluded that the Agent did not take enough steps to check the information before advertising it to the public, and therefore her actions were unprofessional in failing to determine the zoning of the EP lands and that the actual location of the EP lands backed onto the subject property. There were public maps and records available to avoid such a misrepresentation and error. The Panel held that the Agent should have obtained written records of the true zoning.

The Agent was fined $5,000.00.

This is a lesson to be learned by all. Do not include anything in a listing that is not fully verified. If any doubt remains include a condition to warn that the agent has taken reasonable steps to verify the information, but that the Buyer is required to independently verify any information that is critical to the Buyer in their decision to purchase this specific property.

To see the full discipline decision click here.

The content of this article is intended to provide a general guide to the subject matter. The information does not constitute legal advice and a solicitor and client relationship is not created.

Shari D. Elliott
Elliott & Elliott
135 Bayfield Street, Suite 101A
Barrie, Ontario, L4M 3B3
Tel.: 705-797-2672
Fax: 705-797-8445
Email: shari@elliottlawyers.com

 

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