Property Measurements: Buyer Beware or Seller Beware?
Caveat emptor – buyer beware. This well-established doctrine in Ontario states that in real estate transactions, the onus lies with the Buyer to complete the necessary due diligence in order to discover deficiencies before closing. In other words, unless the Buyer completes the proper due diligence and properly requisitions all deficiencies to the Seller, the Buyer takes the property in the condition that they find it, unless there is material misrepresentation. A representation is an assertion as to a fact, true on the date the representation is made, that is given to induce another party to enter into a contract or take some other action (Thomson Reuters, ‘Representations and Warranties’ (2025) <Practical Law> accessed January 30, 2025). If there was a material misrepresentation made by a Seller, a Buyer may be entitled to legal remedy in various forms such as rescission (cancellation), specific performance (completion of the contract), or monetary compensation.
When it comes to the issues of mispresentations relating to property measurements, the common law (case law) in Ontario confirms that the specific facts of every case will shape the Court’s decision on whether or not the misrepresentation was material. Some factors that may influence a Court’s decision are:
The age and experience of the Buyer: if the Buyer is a young first-time homebuyer, a Court will find material misrepresenataion more easily. On the other hand, if the Buyer is an experienced real estate developer or agent, the Court is less inclined to find that a misrepresentation made by the Seller materially influenced the Buyer’s decision to enter into the Agreement of Purchase and Sale.
The intended use of the Buyer: if the discrepancy in the property measurements renders the Buyer’s original plans for the property impossible (e.g., development of a certain number of dwelling units or severance into smaller lots), the Court is more likely to find that the misrepresentation was material.
Whether or not the Buyer made use of all of the information available to them: even if the Agreement of Purchase and Sale did contain a misrepresentation by the Seller, if the Buyer did not properly make use of all of the information or tools available to them to discover the misrepresentation, the Court may not find that the misrepresentation was material. For example:
Did the Buyer visit the property and take measurements?
Did the Buyer review all other available reference material provided by the listing agent?
It is not always clear whether or not a Seller’s misrepresentations relating to measurements are material or not. However, it is clear that Sellers should be cautious before listing their properties to ensure that they are not inadvertently making material misrepresentations. If you are a Seller:
Double check your agent’s work. Ensure that they are not blindly following previous listing information.
Ensure that your agent uses full legal descriptions in the Agreement of Purchase and Sale.
Do not fully rely on the doctrine of caveat emptor.
Qualify all property measurements with the phrase: “Buyer/Buyer’s Agent to verify all measurements”.
Author:
Jennifer (Min Ju)Park
Partner
e: jpark@realtycarelaw.com