Area – BC Assessment Authority Information Inaccurate #289
By Gerry Neely
We can draw two conclusions from the facts described in a recent decision in which a buyer sued for damages because the area of the land purchased by the buyer was only 258.5 acres instead of 309 acres. The first conclusion is that one cannot rely upon the British Columbia Assessment Authority for accurate information about the size of a property. The second is that, where the area of the property is important to the buyer, or where the price per square foot or acre is an important fact in determining the total price, the Contract of Purchase and Sale should contain a warranty as to area.
The agent who prepared the offer in the first decision added, after the legal description, "309.17 acres." It was only after the sale closed and a survey was done that the buyers found the property contained the lesser acreage. The buyer sued for misrepresentation and breach of warranty.
It was clear from the evidence that the owners of the property did not know the actual area, but thought it to be about 300 acres. In an attempt to confirm this information, the listing agent telephoned the BC Assessment Authority which confirmed that the acreage, according to their records, was 309, but they had no way to verify this. The listing agent was referred to the Surveyor General’s office in Victoria which gave him an official survey plan that did not state the size of the property.
The buyer’s agent was told that no survey had been done and that neither the seller nor the listing agent could provide any more information concerning the actual area of the land. The buyer’s agent attempted to confirm the information concerning acreage but his only source was the same BC Assessment Authority.
It was also clear from the evidence at the trial that the buyer, who had been involved in a number of property transactions, was prepared to accept the information provided by the BC Assessment Authority as accurate. The seller successfully resisted the claim for damages for misrepresentation for two reasons. Firstly, the buyer admitted that he had been involved in the purchase of a number of properties and he had never run into a situation where the tax assessment data was wrong. He acknowledged that he assumed that data from this source was accurate. Therefore, he had not placed any reliance upon the information obtained from the sellers. In addition, the judge held that neither the sellers nor the listing agent had made a false statement, either negligently or at all.
The buyer’s next position was that the inclusion of the acreage in the legal description amounted to a warranty that the property would be that size. In examination for discovery, the buyer’s agent said that his practice when a warranty was intended was to use language such as "the vendor confirms" or "the vendor warrants" to indicate that the seller was making a promise about the property.
The judge concluded that the addition of the number of acres to the legal description was not a warranty as to the quantity of land being sold.1
In reaching this decision, the judge had referred to, inter alia, a case where it was stated in the contract that 9 acres were being sold. Although it was subsequently discovered that the property was only 7.14 acres, the judge concluded that the buyer was interested in the particular piece of property, whether it contained 9 acres or not, and the reference to 9 acres did not amount to a warranty.
A judge came to an opposite conclusion in another case where the contract contained the following wording: "Legal description, see addendum attached 1110 acres Gabriola Island." The actual area was 57.6 acres less and the buyer sued to recover the difference, arguing that the price was negotiated on a per acre basis.
There was evidence of other transactions in which blocks of land had been sold by MacMillan Bloedel at prices that worked out to exactly $10,000, $5,000 or $4,000 per acre. The evidence also included a sale in which a rebate was voluntarily given to a buyer when it was discovered that the area of land was less by 19 acres and the price had been fixed at $5,000 per acre.
The judge accepted this evidence to hold that the reference to 1110 acres was not in the contract by way of a minor description of the property, but was the fundamental basis for determining the purchase price. As such, it was a warranty which entitled the buyer to damages equal to $4,000 per acre for the shortfall.2
|1.||Ocean Fresh Products Ltd. et al. v. Ewalt, BCSC, Penticton Registry, Reasons for Judgment, May 26, 1998.|
|2.||Coastland Wood Industries Ltd. v. 528428 B.C. Ltd., 1997 B.C.J. #27110 (BCSC).|
To subscribe to receive BCREA publications such as this one, or to update your email address or current subscriptions, click here.
What we do
Popular tags within Legally Speaking
- Contract of Purchase and Sale
- Real Estate Practice
- Standard Forms
- Statistical Releases
- Strata Properties
Popular posts from BCREA
Housing Market Update – January 2023Jan 16, 2023
New Statutory Holiday on September 30, National Day for Truth and ReconciliationSep 09, 2021