Verify Accuracy in Listing Information #421
CATEGORY: Legally Speaking
TAGS: Multiple Listing Service Verified Listings
By Jennifer Clee
Most REALTORS® and members of the public recognize the Multiple Listing Service® (MLS®) as an invaluable tool in the purchase and sale of property. The cooperative sharing of information on properties assists buyers search for suitable homes and sellers maximize the marketing exposure for their properties. Many buyers (and some REALTORS®) believe they may rely on the accuracy of the MLS® information and recover damages against the listing REALTOR® if the MLS® information turns out to be incorrect. Recent case law indicates it isn’t so straightforward.
Every REALTOR® using the MLS® owes a duty to ensure the information supplied to MLS® is accurate. However, mistakes happen for many reasons, which means there’s a risk that the MLS® information on any given property may be inaccurate. Therefore, all information published by the MLS® or the various real estate boards using the MLS® system contains a disclaimer. The purpose of the disclaimer isn’t to relieve a listing agent’s duty to exercise care in regard to the accuracy of the listing information, but to put buyers and their agents on notice that the information contained in the MLS® is specifically not guaranteed, and should be checked if important to the buyer.
In a recent decision of the BC Supreme Court,1 the buyer of a residential property sued the listing REALTOR® as a result of an alleged misrepresentation as to the range of lot size that appeared in the MLS® information for the property. While the dimensions of the lot were accurate, the listing REALTOR® had inadvertently put the property in the wrong square footage category.
The court dismissed the buyer’s claim against the REALTOR® for negligent and/or fraudulent misrepresentation after applying the test for establishing liability for negligent misrepresentation set out in a 1986 BC Court of Appeal decision.2
That test requires a plaintiff to establish each of the following four elements: a false statement negligently made, a duty of care owed by the party making the statement, reasonable reliance on the statement by the recipient and loss suffered as a consequence of that reliance. Failure to establish any one of the four elements is fatal to a claim for negligent misrepresentation.
In this case, the defendant REALTORS® conceded the information in the MLS® was inaccurate but argued successfully that the buyer neither relied, nor reasonably relied, upon the lot size information in the MLS® in deciding to purchase the subject property. The court considered the evidence that the buyer never discussed the size of the lot with the listing REALTOR® and had an opportunity to view the property to determine whether the property suited his needs. The court also relied on a substantial body of law holding that the disclaimer on the MLS® information, whether read by the buyer or not, operated as a clear warning not to rely upon the information, and as confirmation that the provider of the information was not assuming a duty of care.
Buyers’ agents are reminded that it’s the buyer’s ultimate responsibility to investigate a property they propose to purchase.3
As the accuracy of the information in the MLS® is specifically not guaranteed, a buyer should verify any information in the MLS® that’s of concern. A buyer’s agent can protect their client by making their client’s offer subject to the buyer confirming the accuracy of the information with which the buyer is concerned, or by including a specific term or warranty in the Contract of Purchase and Sale.
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