May 01, 1992

Misrepresentation, Innocent; Mobile Home, Refusal of Landlord to Consent to Assignment #186


By Gerry Neely

Normally, the listing agent for the owner of an existing home is unconcerned with set backs or other limitations which would affect the size and location of a home to be constructed upon the lot upon which the home sits. A recent decision may change that when the listing salesperson discovers that the prospective purchaser intends to demolish the home.

In the case in question, the City of Vancouver had passed a bylaw that prevented construction on the front 7' of a 50' x 1 10' lot, reserving this portion of the lot for possible future expropriation for road widening. This limitation was not (unsurprisingly) registered against title and no one involved in the transaction was aware of the bylaw until after the offer was accepted. When the purchaser discovered this limitation and refused to complete, the vendor sued for damages resulting from the sale of his property in a falling market.

The only representation made by the listing salesperson was the lot size. She made no mention of the 7' building restriction because she was unaware of it. The judge held that this was an innocent misrepresentation by omission. The effect of the bylaw was that there was a potential for expropriation of about 6% of the property and that if expropriation occurred, the travelled portion of the road would be that much closer to the house. In addition, siting of the proposed house and pool wanted by the purchaser would be more difficult. Again, none of this information was known to the listing salesperson.

The cumulative impact upon the purchaser's plans of the restrictions in the judge's opinion, meant that the lot she bought was fundamentally different from the lot which was offered for sale to her. The innocent misrepresentation was a material misdescription which entitled the purchaser to the return of her deposit and denied the vendor damages.

The decision is under appeal and it will be interesting to see the results of the appeal because the judge's findings impose a very rigorous duty of care upon a licensee.1


A recent case examined the question of whether the owner of a mobile home park acted reasonably in refusing a tenant's request for an assignment of the tenant's pad to a proposed purchaser of the tenant's mobile home. In 1988 the owner of the park, as landlord, gave notice to the tenants that to preserve the quality of the park and the value of the homes within it, no future sales of 10' wide mobile homes would be permitted.

Since pads were in short supply, the owner of a 10' wide could obtain a higher price for the unit if it was sold as part of a contract which included the assignment of a pad to the purchaser. The landlord had no objection to the purchaser or to the purchaser's proposed use of the home. The landlord's only objection was based upon its policy restricting the continued use of 10' wides. The question then was whether the landlord had acted arbitrarily and unreasonably in withholding its consent, contrary to Section 12 of the Residential Tenancy Act. The judge was satisfied that the landlord was entitled to consider the economic impact of an assignment on the value of the landlord's property. The judge also accepted evidence that as a general proposition, mobile homes do deteriorate over time, both in condition and value. The landlord's objective in preserving the value of its property and that of the mobile home owners in the park was reasonable.

However, there was no evidence that the tenant's mobile home was below the standards of maintenance of other homes in the park or that its condition reduced the value of the landlord's property or the value of the other mobile homes. The landlord's policy, as reasonable as it was in general terms, created an injustice to the tenant. As a result, the judge held that on these facts the landlord had acted unreasonably in withholding its consent to the assignment.2

 1.Tunner v. Novak et al S.C.B.A.., Vancouver Registry #C893872, October 10, 1991.
 2.Karpis v. Lark Enterprises Ltd. S.C.B.C., Vancouver Registry #CX914992, December 5, 1991.

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