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Feb 01, 2004

Small Claims Court Actions - Three Cases Against REALTORS® for Breaches of Duty #368

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By Gerry Neely
B.A. LL.B.

The Small Claims Act is intended to encourage the just, speedy, inexpensive and simple resolution of claims less than $10,000. The relatively informal process enables people to appear on their own behalf, and losers are not liable for legal cost incurred by winners who choose to be represented by lawyers. The sentiment of, "I have nothing to lose but time," may be the main reason for some cases brought against REALTORS.

In one case, the buyer of two condominium units, who had to pay assessments of $7,762 and $10,285 to repair leaks, sued the listing agent in two separate actions because the agent did not tell him face-to-face that the building leaked. Neither he nor his agent asked the listing agent any questions concerning the building. The strata and general meeting minutes, which the buyer read, clearly referred to the problem.

The buyer removed the contract conditions, believing he was protected by a clause in the contract requiring the seller to pay for any assessments made before closing, but the assessments were made after he took title. A lawyer he consulted before closing advised him he could either repudiate the contract or close.

The judge ruled in favour of the agent, noting that damages were due to the buyer's failure to assess the information and his decision to close after receiving legal advice. The buyer appeared on his own behalf. 1

In another case, an agent's listing on the MLS® stated a home was connected to the municipal sewer system. The buyers lived in the home for ten years before they discovered it had a septic tank system, which was not evident by visual inspection. The previous owners thought the home was on the municipal system because the municipality billed them as if it was. The buyers also paid the sewer charges for ten years.

The buyers sued on their own behalf for the $2,100 cost to connect to the municipal system arguing the listing agent's misrepresentation was negligent and he should have checked the facts. The judge agreed the listing agent did have a duty to verify the truthfulness of information if he was doubtful; however, he had not breached this duty because he had no reason to doubt its validity. 2

In a third action, first-time homebuyers, who received a $3,000 exemption for the Property Transfer Tax on their purchase of a condominium, had to repay the tax when they sold it before the one-year residential eligibility requirement ended. They were aware of the requirement, but claimed the agent said it had been reduced to six months. They sued on their own behalf for the tax, claiming the agent made a fraudulent misrepresentation to obtain the listing and a commission. The agent vehemently denied this.

The claimants had to convince the judge that their version of the facts was more probable than the version put forth by the agent. The judge's impression after hearing the evidence was that neither party deliberately misled the court, but the problem was a result of misunderstanding and miscommunication. The claimants' action failed because they had not proved beyond a balance of probability that the agent made the statement. 3

  1. A & J Soares Holdings v. Edward Wong & Associates et al., PCBC, Vancouver, Reasons for Judgment, March 11, 2002.
  2. Gilchrist v. Centre City Real Estate Inc., PCBC, Prince George, Reasons for Judgment, October 1, 2003..
  3. Louie v. Cheung,PCBC, Vancouver, Reasons for Judgment, December 16, 2002.

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