Property Condition Disclosure Statement, the First (?) Court Decision #219
CATEGORY: Legally Speaking
TAGS: Contract of Purchase and Sale Property Damage Sales Brochure
By Gerry Neely
An owner of a house who was prepared to take a lower price because of its condition, rather than repair it, signed a Property Condition Disclosure Statement (PCDS) which was amended as follows:
"L. Are you aware of any
roof leakage or unrepaired damage?" "Yes"
Section 4 of the PCDS set out by way of explanation, for water stained drywall, that it came from the skylight, following a record snowfall two years earlier, without any further leakage from the succeeding years heavy rainstorms.
No explanation was given for water stained drywall in a storage area under a deck which the purchaser, upon his second inspection, could only observe through a window because the key to unlock the storage room door was not made available to him.
The purchaser's concerns about the roof led to an offer conditional upon his obtaining a satisfactory roof inspection. This was provided by a roofer, who had examined the roof several months earlier, at the request of the owner and the condition was removed.
When the purchaser moved in he found that the roof leaked (from the skylight and around a chimney) and the rot and damage in the storage area was greater than he expected. The source of this damage, which was not evident until the wall was removed, was a leaky balcony drain pipe located within the walls of the home.
The purchaser sued to recover the costs of repairing the storage area. He claimed that the vendors had made a false misrepresentation with the intention that he should rely upon it and that he had relied upon it to his detriment.
Part of his argument was the PCDS failed to refer to the moisture problems in the storage room, of which the vendors were aware, which in the purchaser's mind was proven by the vendors' failure to provide the licensee with a proper key and their refusal to allow the purchaser to have access to the home prior to closing, even though it was empty.
The judge said that a vendor who gives a PCDS to a purchaser intends the purchaser to rely upon the representations contained within it. In this instance by amending "L" and disclosing a reason for the water stains, which the purchaser had no evidence to contract, there was no representation with respect to the roof upon which the purchaser could rely.
The judge made no comment as to whether the vendor had an obligation to disclosure the condition of the store room. Instead he noted that the patent defect seen by the purchaser should have alerted him to the possibility that there might be more damage than appeared.
Had the purchaser insisted upon an inspection he would have found the bulge in the drywall which was evidence of the greater damage. The purchaser's claim was dismissed.1
A little puffing in a promotional sales brochure is unlikely to become a representation upon which a purchaser can rely, unless the representation is included in the Contract of Purchase and Sale. A sales brochure for a condominium development not yet constructed referred to the units as "luxury city homes of 'exceptional quality'; 'architect designed interiors'; 'first class finishing'". The purchaser sued for damages claiming that he relied upon the sales brochure and it was an implied term of the contract with the vendor that construction be done in accordance with the standards described in the brochure.
The purchaser lost because the judge wasn't satisfied that the promotional information was intended by the parties to form part of the contract. In addition, it was not a term that would have been essential to make completion of the contract effective. Finally, the judge was uncertain as to how one would determine the exact standards implied by the words in the material.2
The second case in column #182 discussed the circumstances under which husband and wife in a matrimonial dispute were ordered to pay a commission to an agent. The owner's appeal of this order to the B.C. Court of Appeal was unsuccessful, leaving the original order in favour of the agent in place.3
|1.||Fisher v. Faucher, B.C.P.C. (1993) B.C.J. No. 2005, Campbell River Registry No. C1449.|
|2.||Abramowich v. Azima Developments Ltd., 86 B.C.L.R. (2), 129.|
|3.||D.K. Realty Associates Ltd. v. Haines, B.C.C.A., Reasons for Judgement, December 8, 1993.|
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