The design of MLS listings strongly encourage real estate agents and their sellers to share as much information about a property as possible, including the measurements of each room and overall size of the property. By and large, the inclusion of property size information is standard practice and an expectation of all listings.

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However, even when provided, many listings will include a disclaimer that “buyer and buyer’s agent to verify all measurements.” So what happens when a buyer purchases a property under the mistaken belief that it measures 2,000-2,500 square feet, and later finds out, before closing, that is it actually only 1,450 square feet? The Ontario Court of Appeal in Issa v. Wilson, 2020 ONCA 756 answered that question.

The buyer, Hassan Issa, a 26-year-old, first-time homebuyer, enlisted the services of real estate agent Wasim Jarrah of Keller Williams Realty Centres to assist him in buying a property. Issa was told by Jarrah that the home he was interested in buying, in Stouffville, Ont., was about 2,100 square feet. The agent had obtained this information from the seller as well as from a previous listing for the home. Neither the agent nor Issa had verified the measurement themselves.

Prior to making an offer, Issa visited the home twice. During his second visit, he met with the seller, John Wilson, who told him that the property was about 2,000 square feet.

Issa made an offer to purchase the property and that offer was accepted.

When Issa’s bank did an appraisal of the property, he learned that the property was actually 1,450 square feet. He immediately communicated to the seller that he did not want to complete the purchase of the home and requested the return of his $50,000 deposit.

When the seller refused, Issa commenced legal proceedings seeking a declaration that the Agreement of Purchase And Sale was null and void and requested the return of his deposit.

The case proceeded to a one-day trial. After hearing the evidence of the parties, the trial judge found in favour of the buyer, Issa. She wrote: “In this case I do not find that Mr. Issa’s inspection of the subject property determined his expectations. He was given representations from both Messrs. Jarrah and Wilson that the property was 2,000 or greater than 2,000 square feet and as well relied upon the MLS agreement, which set out 2,000 to 2,500 square feet. His inspections did not override his expectation that this was the size of the property. (I take his young age, inexperience with square footage, and being a first-time homebuyer into account when considering the reasonableness of his belief.)”

Keller Williams Realty Centres appealed to the Ontario Court of Appeal. The court agreed with the trial judge for four reasons:

  1. Both the real estate agent and the seller had made explicit representations to the buyer about the size of the property. Further, the agent agreed that he was negligent in making the statement;
  2. The size discrepancy between what Issa thought he was buying (2,000-2,100 square feet) versus the actual size (1,450) was significant – it represented a 42 per cent difference;
  3. The buyer’s actions showed that he was ready to close the transaction up until the time he discovered that the representation was incorrect and when he found that out, he immediately communicated his intention to the seller; and
  4. There was no error made by the trial judge in referring to the buyer’s age and inexperience with buying a home.

The court went on to say that there is no absolute certainty that just because a buyer personally inspects a property, that he or she cannot rely on a representation made to him/her about an aspect of that property, by the seller or an agent. That inspection, in and of itself, does not displace any representations made.

Further, where there is a misrepresentation, a contract can be rescinded if the false statement was material and enticed the innocent party into signing the contract. In this case, the court found that information about the size of the property was material to the bargain and was a big factor in Issa’s decision to purchase. The court ruled in favour of the buyer, rescinded the agreement of purchase and sale and awarded the return of the deposit to the buyer.

Lessons learned: It is crucial that any statements made about a property be independently verified, particularly where such verification can be done with relative ease by the party making the representation.

Failing which, the party to who the representation is made may be able to rely on the veracity of the statement provided, particularly if that statement was material in their decision-making.

21 COMMENTS

  1. Understanding what square footage of a home will be considered and what may or may not be considered square footage to an appraiser is very important. For instance (as a guide only) a third floor attic that has been finished with sloped walls with below the shoulder height or lower (all the way down to the floor) may not be considered as part of the square footage. When describing square footage as a listing agent, I always describe it this way; “This home has 2500 Square feet spread over 3 floors”. This will clarify 2 floors plus a basement or 2 floors plus an attic. And I always spend the money to have custom floor plans drafted. I don’t use the floor plans that come with a matter port or any other photo/digital device. When an agent talks offer and request a copy of the inspection report or status certificate, I also include a copy of the floor plans with a note that says, “attached is the floor plans which I relied upon for square footage”. This works for me.

    • Omer it may work for you but you are still negligent describing the square footage as such. You can use the floor plans but if it is easy to measure I don’t believe a judge would look favourably at you as you had the opportunity to verify and chose not to.. The home you are describing is not 2500 square feet over 3 floors as if you are counting the basement this is an example of misrepresentation.

  2. I worked in Michigan with a broker’s licence. I sold a house with incorrect measurements on the actual survey. No one sued anyone. Buyer got $10,000 from Seller. Case settled. I was lucky.
    How could anyone have known that? It was the new survey after sale disclosed it.

  3. I witnessed the very same thing a few years ago. The difference was the buyer was going close the deal but wanted $45,000 in compensation from the agents because of the difference between the 1450 sq.ft. in the listing and the 1000 sq.ft. in the appraisal. Our real estate board requires members to subscribe to the ACREE standards (Alliance for Canadian Real Estate Education).
    It’s in our encyclopedia on page 686 if anyone is curious.
    As previously mentioned, if you don’t know the difference between a little house and a big house – maybe this in not the right business for you ?

  4. What’s the regulation on measurement listings in the jurisdiction? Was the 2000+sqft expressly or assumed as above grade? Or did it include the basement?

    • really irrelevant as square footage has not changed , just realtors interpretation of square footage has changed Square footage has never included a basement as it is below grade .

  5. In the good old days, it was incumbent upon the Listing Agent to provide all measurements of the rooms, get all pertinent facts such as property taxes, maintenance fees for condos, etc… listed and accurate.
    Listing Agents now do NO due diligence and put in a disclaimer that all should be checked by the Buyer’s Agent. ALL The Buyers’ agents interested in the property then have to scramble for the documentation from the City, take measurements, and individually get the facts… a total waste of all the buyers’ agents’ time, when this could have been done in the first place by the Listing Agent.
    About time Listing agents market the property factually or else be held accountable!

  6. Mrs Taylor,
    Was the bank appraisal done to fulfill the mortgage condition? Did the appraisal come in at the sale price? If not, the condition of mortgage financing may not have been met therefore contract expires at a given time and date, a mutual release is signed and deposit refunded. End of story unless the buyer negotiated in bad faith but this was not the case.

  7. A quick check with MPAC for $5 buys the floor area of the property in question. Likewise if the buyers agent bought the floor areas of the neighbouring similar sales it would also provide guidance as to a reasonable offer. If all else fails a good old fashioned tape measure and some simple multiplication works very well
    Peter Stewart DAR
    Certified Appraisal Reviewer
    CNAREA

    • Thank you! You said it exactly as I would. I really don’t understand this happening. Are some agents getting lazy? I always provide the floor plan for my Buyers and Sellers.
      When I complete a deal, I need it to close.

      • MPAC no longer discloses square footage in my area….they give only a range as they don’t wish to be held liable. I do room dimensions with a laser measuring tape and changed to a photographer who also does laser square footage with his equipment. It was REALLY nice when we could use the MPAC numbers

  8. I am sorry but as a realtor myself misrepresenting square footage to that extent is outright negligent. Had it been 100 square feet i doubt that the judge would have ruled as he did. If the realtor cannot see that there was a 700 square foot discrepancy then perhaps another profession should be considered.

  9. The rest of the story involves our/your RECO E & EO insurance fund. Look past the commentaries about “inexperienced and square footage” this was a Spring 2017 Double-ended Sale that was repudiated by the Buyer when values fell and mortgaging became more difficult. After all the claims, counter-claims, judgements and appeals etc. It boils down to who/what paid the Seller’s loss? – Dear Registrant read the trial summary and the Appeal summary and decide if the whole story has been told.

  10. And we wonder why some think some Realtors are lazy. It’s because they are, which reflects poorly on those who aren’t.

    There needs to be a rule for Realtors: One strike and you’re punished financially. Two strikes and you’re out. Selling real estate ain’t baseball; it’s not a game.

    • Amen, Brian. Any REALTOR who cannot see, at a glance the difference between 2100 s.f. and 1459 s.f ought not to be in this business…not a game.

    • Lazy is not the word… I would say some Realtors are simply afraid to state square footage when there are so many variables to consider. Do we include the space between interior and exterior walls? Closets? Stairs? These spaces can add up… a square footage range would be so much more appropriate.

      • Secret:

        The word ‘is’ lazy. All a Realtor has to do to determine square footage is measure the outer dimensions of a building, and go from there. Speaking as a former Realtor and Appraiser, I can state that sometimes completing that task can be an onerous one depending upon the style of the building, the weather and time constraints. That’s where the laziness factor can rear its ugly head, as it too often does.

        You know not of what you speak when you ask “Do we include the space between interior and exterior walls? Closets? Stairs?”. You’re clearly out of your depth on this issue.

        Are you a secret agent…as in Real Estate Agent?

        • If all else fails speak to the city bldg department. Typically they will tell you that not more that 30% of the land footprint can be occupied by the physical building. That being so either in sq.ft or m-sq, should at least give you a base guideline as to the size of the house. And confirmed as an approximation as to house size.

          Several years ago although typically I didn’t state specific square footage on listing information, but my own house was sold on MLS, and I included the builder’s drawings as representing the structure’s square footage noting that it was the builder’s representation not mine.

          The house was a multi-level dwelling with some areas having 14′ high ceilings, others 20′ high. It would have even been difficult for an appraiser to confirm other than what the builder had presented to the city seven years earlier when I had bought it. The buyer’s Insurance company allegedly told the buyer the size was incorrect. She reported me to RECO who spent many weeks investigating all my listings I had had on MLS.

          The investigator spent approximately fourteen hours reviewing my website listing accompanying property stories, newspaper ads and any form of marketing. How did I know that he hadn’t just accidentally left his computer running at my site which is what I was told in reply to my defence?

          I had a program at the time that told me exactly what pages he had spent time at, reviewing my materials. What day, what time, for how long on each page, and plenty of other resourceful information verifying his hours, days, and weeks checking out my dozens of listings, page by page. Ultimately the file was closed with no further discussions. I had done nothing wrong.

          But it left me wondering exactly how the insurance agent had determined the square footage because of course I had insurance and the topic had never come up.

          Carolyne L 🍁

    • Mr. Lowe – the buyer received his $50,000 deposit back plus any accrued interest as well as $10000 in costs on the appeal. I do not know if the appeal costs included the costs of the first decision as it is not specified.

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