Jan 21, 2019

Disclaimers Against Reliance: Not Always a Magical Cure #510

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By Oana Hyatt,
B.Sc.(Pharm), LL.B.

Number 510

In a recent case from the BC Provincial Court1, the following disclaimer was found ineffective in defending the buyer's claim that the sellers' agent was negligent in including incorrect square footage calculations in the MLS® listing:

"The enclosed information while deemed to be correct is not guaranteed."

The judge found the sellers' agent was negligent in including the incorrect square footage. The judge distinguished this type of general disclaimer from other more specific disclaimers which, in other cases2, were found to be effective in rebutting an allegation of a duty of care owed by a seller's agent to a buyer. More specific disclaimers may include:

  • "All measurements to be verified by purchaser if important."
  • "Information should not be relied upon without independent verification."

Note that no form of disclaimer will protect sellers' agents who know the information presented is inaccurate3.

However, where a sellers' agent has no reason to believe the information conveyed to potential buyers is inaccurate but has not independently verified its accuracy, it is advisable to include a disclaimer and to make that disclaimer as specific as possible. In some circumstances, it may also be advisable to include the name of the source of the information being presented, such as municipal or other tax authority records, surveys, other professionals, etc.

For buyers' agents, it is important to determine the motivation of the buyers and to investigate any information that may be important to the buyers given their particular motivation or interests. Where buyers' agents cannot independently confirm the accuracy of the information presented by the sellers or the sellers' agent, they should advise buyers to retain other professionals who can verify the information and/or should consider including a subject in the contract of purchase and sale shifting the risk onto the seller for the accuracy of the information presented.

An interesting situation can arise in cases where buyers are purchasing a bare lot for development from a seller who has prepared potential building plans for the lot. Buyers might well assume, having viewed such potential building plans, that they should be able to build a home according to those building plans. However, in many cases, such potential building plans have not yet been approved by the municipality or the municipal approval may have expired, or the plans may not have been vetted by professionals such as structural engineers, and may well be unachievable in the end. A sellers' agent in such a situation should be careful to include a specific disclaimer regarding the need for prudent buyers to retain their own professionals to verify the possibility of the building plans being used in the construction of a new home.

Oana Hyatt
B.Sc. (Pharm), LL.B

 1.Koerber v. Salmon, Unreported, November 23, 2018, Provincial Court of British Columbia, Action No. 18364, Nelson Registry.
 2.Olympia & York Developments Ltd. v. Marshall, 1990 B.C.S.C. 1023.
 3.Real Estate Rules, RECBC, s. 4-7.

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By Oana Hyatt,
B.Sc.(Pharm), LL.B.

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