Happy Monday. What a great way to start the week with free coffee and pastries. The whole Bosley Company was invited to check out a new condo project in Yorkville so we decided to have our morning meeting in the sales centre for 133 Hazelton (check out www.133hazelton.com) before the presentation by the builder himself, Mizrahi Khalili. Whenever we get together as a company whether socially or for business, you can be assured that it is an entertaining event. Put a lot of peacocks in a room and watch what happens.
After going over new listings and sales data we jumped right into our main topic; agent responsibility. Tom Bosley and the other managers decided to make everyone aware of a recent law case that has set some new precedents. The story can be reviewed here; http://www.canlii.com/en/on/onca/doc/2011/2011onca352/2011onca352.html The case itself, while lengthy, should be read thoroughly by every REALTOR out there because it affects your business. The basics of this case are clear. The Buyer buys a home that has an SPIS. After moving in, the buyer discovers that the minor structural problem disclosed in the SPIS is actually a major problem that costs more to fix than the purchase price of the home. The buyer sues the seller and wins even though title insurance covers the cost of the whole repair. The Seller appeals and the appeal judge upholds the decision but also includes the agent (who was in multiple representation). The seller and the agent have to split the damages. In the decision, the judge felt that the agent should have been more diligent in his handling of the structural problem, that given his 30 plus years in the business, should have known that the problem was worse than disclosed by the seller.
Here is the crux of the decision; We, as agents, need to be aware of a host of problems a home or condo may have. I am not suggesting that we should know about structural deficiencies but we should know when that little red flag goes off in our heads. Simply asking a seller about the home is not enough. Our due diligence must be factual and in-depth. Don’t leave anything to chance. If you don’t know the answer, or feel that the seller is intentionally withholding critical information then you have to dig deeper. In order to cover yourself properly you must contact the necessary specialists whether they be home inspectors, structural engineers, city planners or fortune tellers. (just joking about the fortune tellers).
During the meeting, I asked the question about what our duties are if we are representing out clients who wish to buy a private sale property (FSBO) or a simple posting. The short answer is that these types of listings essentially put twice as much onus on us as REALTORS. It is not the answer you really want to hear. Companies that post a listing on MLS are supposed to abide by the rules of MLS and RECO, that is, represent their properties truthfully and accurately. While they often include in their materials a disclaimer that they are not responsible for the accuracy of the listing, the reality is that they cannot opt out of these rules.
The lesson is clear, we are duty bound to show any listing on MLS even if it is a mere posting however our priority is to protect our clients and that may mean spending more time and money researching every possible angle.
Have a great week!