Bowman v. Martineau , 2019 ONSC 1468 (CanLII)
Buyers purchase home. After the closing, the buyers discovered severe water and mould damage from water perpetration through the building envelope. Agent was acting in Multiple Representation Capacity representing both buyers and sellers.
1) Home inspector;
4) Listing brokerage
Home Inspector settled the dispute with the Buyers via a Release and Settlement Agreement – Judge also did not find at fault.
At the time of the purchase, the buyers did not know of the historical and ongoing roof leaks.
Agent did not provide the signed SPIS copy to the Buyers which disclosed various items and believed that it was provided.
Post-closing, the buyer commenced renovations and found extensive and apparent long-standing water infiltration and mould growth. He also noticed fresh paint over wood ceiling moulding.
Buyer argues that had he been warned of ongoing roof leakage, he would have made additional inquiries to verify the possibility of damage. Had he been aware of roof leakage and the septic problem, he would not have completed the purchase.
Conclusion Regarding Liability – Judge Finds:
1) Agent failed to give the Buyers the SPIS;
2) failed to review the SPIS with the Buyers; and
3) failed to review the SPIS with the Sellers
As an expert witness, Mr. Barry Lebow confirmed that each of these failures constitutes a breach of her professional obligations to the Buyers and has breached her duty of care owed to the Buyers and is therefore liable for the consequent damages.
1) Seller had knowledge of the condition, sourced from her living there day-to-day, which went far beyond what a home inspector could detect based on a one-time inspection. There was an ongoing water infiltration and she knew it. The musty smell was not old carpets, but mould.
2) in the leading case regarding a vendor’s liability for latent defects is McGrath v. MacLean (1979), 1979 CanLII 1691 (ON CA), 22 O.R. (2d) 784 (C.A.). The court stated: “I am prepared to assume that, in an appropriate case, a vendor may be liable to a purchaser with respect to premises which are not new if he knows of a latent defect which renders the premises unfit for habitation.” [at page 792] - in the case at hand, there is ample evidence that the Seller had knowledge that there was a latent defect (the long-standing water leakage with resulting mould) and that this rendered the house uninhabitable.
Liability of the Agent and the Brokerage
Agent liable and Brokerage vicariously liable for the negligence of the Agent.
Liability apportioned as follows:
Agent and Brokerage: 70%
Buyer is entitled against the Seller(s), the Agent, and the Brokerage in the following amounts in accordance with their respective apportionment of liability (70/30%):
1)Costs to repair the property: $332,706.59
2) Out-of-pocket expenses:
a) Time spent on tear-out $6,604.00
b) Cost of materials and dumpster for tear-out $3,678.13
c) Alternative living expenses (calculated from September 2014 to July 2019): $101,500.00
d) Hydro and insurance bills thrown away: 726.63
3) General damages: $5,000.00
Ricky Rathore., BComm., LL.B (Hons.), ABR®, SRS, FRI, Broker of Record – RE/MAX EMPIRE REALTY, BROKERAGE is a licensed Barrister and Solicitor.
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