A recent court case emphasizes the importance of using a survey and getting accurate property measurements before signing an agreement in a home purchase.
Nancy Ann Pringle was the owner of a detached, two-storey house on a corner lot with irregular measurements on the northern edge of East York, in the GTA. Prior to listing the property for sale, her real estate agent asked if there was a land survey indicating the property dimensions.
Despite the fact that surveys of the property are available at nominal cost in online databases at protectyourboundaries.com and landsurveyrecords.com, Pringle said she did not have one and her agent did not check for a survey. That was mistake No. 1.
Even without a survey, the lot size could have been verified against a copy of the subdivision plan, available at the Toronto Land Registry Office for $15.
Pringle’s agent, instead, checked the database of the Municipal Property Assessment Corporation (MPAC) and noted that the property had a frontage of 87.64 feet by a depth of 0 feet. Mistake No. 2.
The agent then visited the property and measured it himself. Mistake No. 3. He then listed the property on the Multiple Listing Service, incorrectly showing the land dimensions as 87.64 feet by 100 feet. Mistake No. 4. However, the MLS listing did state: “Irregular corner lot — depths to be verified” and “Buyer/Buyer’s Agent to verify all measurements.”
Daryoush Hosseinzadeh is a renovator and builder. In early 2017, he offered to buy the property for $1,200,000, hoping to subdivide it and build two houses there. The offer, drafted by his own agent without checking the dimensions, described the property as having a frontage of 87.64 feet more or less by a depth of 100 feet more or less. Mistake No. 5.
The offer included language that “the buyer is advised to verify any measurements.” This was not done. Mistake No. 6.
The parties agreed on a signback at $1,233,000 with a $100,000 deposit. The seller inserted the words “to be verified” above the lot dimensions.
When Hosseinzadeh discovered the true dimensions of the lot, and that it was too small to divide into two lots, he refused to close. The property was subsequently resold for $1,280,000.
A new survey prepared during the litigation showed the lot area as 5,787.7 square feet. If the lot was 87.64 by 100 feet, the size would have been 8,764 square feet — a huge discrepancy.
This past March, the parties appeared before Justice Patrick Monahan. Each sought payment of the $100,000 deposit.
In his ruling awarding the seller the entire deposit and court costs, the judge wrote that the buyer “is the author of his own misfortune.”
The “to be verified” wording meant that Hosseinzadeh “had the responsibility to satisfy himself as to the accuracy of the lot dimensions.”
By initialing that language and accepting an unconditional purchase agreement in the face of known risks, “he cannot now seek to avoid its binding effect when those very risks materialized,” the judge wrote.
Bob Aaron is Toronto real estate lawyer. His Title Page column appears on this blog, Move Smartly, and in The Toronto Star. You can follow Bob on Twitter @bobaaron2 and at his website.
May 21, 2018
Legal |