Death at a Property Revisited #514
CATEGORY: Legally Speaking
TAGS: Death Material Latent Defects Property Disclosure Statement Stigmatized Properties
In 2007, a man was murdered outside the gates of his Shaughnessy home. The murder, described by the police as a targeted killing, remains unsolved. The victim lived in the home with his wife and two children. The property was owned by his mother-in-law, who resided in China. One of his daughters attended a private school nearby. When the school learned that the killing might be linked to organized crime, the daughter was asked to leave the school as they feared for the safety of the other students. The daughter relocated to a public school. The next year, the daughter enrolled in a private school in West Vancouver and the family moved to West Vancouver. Roughly a year later, the wife ("Seller") listed the Shaughnessy property for sale on behalf of her mother.
The Seller told the listing agents that she was selling the property because of her daughter's enrollment in the West Vancouver school. She asked the listing agents if she was required to disclose the murder of her husband to prospective buyers. She was advised to seek legal advice on that matter. In the Property Disclosure Statement, the Seller denied knowledge of any material latent defect in the property.
A prospective buyer had their agent ask the listing agent the seller's reason for selling the property. The listing agent advised that the family had moved to West Vancouver to be closer to the daughter's school. No mention was made of the murder. The buyer entered into a Contract of Purchase and Sale but before completion, discovered the details of the murder and refused to close on the grounds that the Seller had failed to disclose the murder as a material latent defect in the property.
The trial judge found that the murder is not a material latent defect in the property, which would need to be disclosed, but a stigma in the property, which does not.1 A stigma is most readily described as a subjective factor that might be important to some buyers but not others. The trial judge did, however, find that the seller's answer to the question of why she was selling was incomplete and amounted to a fraudulent misrepresentation by omission. The trial judge determined that the husband's murder was a factor in her selling the property and even though the question asked was a general one, the buyer "was entitled to an accurate answer, rather than one calculated to conceal Mr. Huang's death as a reason for the plaintiff's decision to sell the property."2
On appeal, the trial judge's decision was overturned.3 The BC Court of Appeal stated: "if the law were now to be modified to require that upon being asked a general question like the one asked in this case, vendors must disclose all of their personal reasons and explain the causes for those reasons, even when they bear no relationship to the objective values or usefulness of the property, the door would be open to a huge number of claims…The doctrine of caveat emptor…places on the buyer the onus of asking specific questions designed to unearth the facts relating to the buyer's particular subjective likes and dislikes. The answer given by the plaintiff's agent to Mr. Deng's question (that the daughter needed a better chance to practice her English) was an honest answer as far as it went, and in my opinion she was not required to supplement it with a description of the entire chain of events that led to the enrollment of the plaintiff's daughter at the new private school—unless the buyer asked specifically why the girl had been at a public school or whether any violent deaths had occurred during Ms. Wang's tenure of the property."4
Once again, BC's highest court has reminded us that the doctrine of caveat emptor or buyer beware is alive and well in this province. A seller is not required to disclose the existence of a stigma in the property, which may be an issue for one buyer but not another. If buyers have personal concerns such as death, ghosts, allergies, etc. that would affect their decision to buy a property, the onus is on them to inquire, by way of a specific rather than general question, as to whether those conditions exist.
Norton Rose Fulbright LLP
|1.||Wang v Shao, 2018 BCSC 377 [for a detailed analysis of the trial judge’s decision see Legally Speaking: Death at a Property].|
|2.||Wang v Shao, 2018 BCSC 377 at para 217.|
|3.||Wang v Shao, 2019 BCCA 130.|
|4.||Wang v Shao, 2019 BCCA 130 at paras 46 and 47.|
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