Agent Not Liable After Client Buys Useless Parcel Located Near Former Dumpsite

Author:Matt Maurer
Date:August 09, 2016
 
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In a recent case, the plaintiff sued the defendant agent and her brokerage for negligent misrepresentation in connection with the plaintiff’s purchase of a vacant three plus acre parcel of land that the plaintiff acquired with the intention of building a house on the property.

The agent initially acted for the vendors and prepared an MLS listing based on information from the vendors. The listing indicated that the property was “suitable for building your dream home” and was zoned as “residential.”

The listing agreement ultimately expired and the vendor decided to re-list the property with another broker. The second broker prepared a MLS listing that was for all practical purposes identical to the MLS listing prepared by the defendant agent when she was acting for the vendor.

The plaintiff and his wife had expressed some interest in the property while the defendant agent was acting for the vendor but did not make an offer during that time. A few months after the initial listing had expired the defendant agent contacted the plaintiff to see if he was still interested in the property. The plaintiff indicated that he was interested but expressed some concern regarding water potability. It was clear from early on that the plaintiff intended to build a house on the property if he acquired it.

The defendant agent advised the plaintiff that the area had a dump on it “years and years ago” which could not be built on for another five years, but that the Township had advised the agent that the property itself was safe to build on.

The plaintiff subsequently submitted an offer which was accepted by the vendor.

After the closing, and spending about $18,000 in preparation for the construction, the plaintiff was advised by the Township that he could not obtain a building permit because the property was located within a “no build” buffer which extended 500 meters around the former dumpsite.

The plaintiff threatened to sue the Township for damages based on the alleged misrepresentations made to the plaintiff’s wife by Township staff before and after the purchase of the property. The plaintiff subsequently negotiated a settlement with the Township, the terms of which included the Township’s purchase of the property from the plaintiff for an amount which covered the plaintiff’s acquisition costs for the property.

The plaintiff then sued the agent for funds expended in a fruitless effort to ready the property for building of his home, including costs relating to a...

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