Buying a home or property is a huge decision that comes with its own set of challenges. Unfortunately, one of the most common challenges that buyers face is misrepresentation by sellers or real estate agents. Deliberate or accidental, misrepresentation can result in expensive problems for buyers. In this blog post, we’ll explore the different types of misrepresentation and the legal remedies available to buyers who have been victims of it.

Misrepresentation can take different forms, but there are three main types: innocent, fraudulent, and negligent. Innocent misrepresentation happens when a seller or real estate agent genuinely believes that a fact about the property is true, but it turns out to be false. For example, the agent might think that the property is zoned for commercial use, but it’s actually zoned for residential use. In this case, the buyer may be entitled to damages, but not rescission.

Fraudulent misrepresentation is different because it involves intentional deception. The seller or agent knows that a fact about the property is false, but they deliberately conceal it or provide false information. For example, they might hide the fact that the property was once used for a marijuana growing operation, or they might inflate the square footage of the property. In cases of fraudulent misrepresentation, the buyer can seek damages and/or rescission.

Negligent misrepresentation falls somewhere in between. It happens when the seller or agent should have known that a fact about the property was false, but they didn’t exercise reasonable care to verify the information. For example, they might have relied on outdated information about the zoning laws. In cases of negligent misrepresentation, the buyer may be entitled to damages and/or rescission.

The legal remedies for misrepresentation vary depending on the type of misrepresentation. Damages are a common remedy across all three types, and they refer to the financial compensation that the buyer can receive for any losses incurred as a result of the misrepresentation. For example, if the buyer discovers that the property is not zoned for commercial use and they were planning to use it for their business, they might sue for damages to cover the costs of finding a new property.

Rescission is a more drastic remedy that effectively voids the contract. It assumes that the contract was never properly formed, and its terms become unenforceable. Rescission can be a powerful tool for buyers who have been victims of misrepresentation, but it can also be a complicated legal process.

Misrepresentation is a serious problem for home buyers, but there are legal remedies available to help them recover their losses. By understanding the different types of misrepresentation and the legal options for addressing it, buyers can protect their investments and hold sellers and real estate agents accountable. If you’ve been a victim of misrepresentation, it’s essential to seek legal advice as soon as possible to determine the best course of action. Remember, buying a home is a huge decision, and it’s crucial to make informed choices based on accurate information.

Business meeting of real estate broker
PATRICK A. BELL – Lawyer at Bell, Jacoe & Company in Summerland BC provides legal help with real estate and wills and estate law.
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