The Ontario Court of Appeal released a decision a few weeks ago that could have far-reaching effects for home sellers and realtors in Ontario. The decision, Krawchuk v. Scherbak, involved a first-time buyer who purchased a home in Sudbury. The sellers filled out an SPIS form, on which they stated that the foundation issues had been resolved years earlier. Unknown to the buyer, there were serious foundation problems, and the sewers regularly backed up. The agent did not know that the sellers were misstating information, but did not inquire as to whether the information was accurate.
The Court ultimately decided that both the vendors and the agent were liable for the purchaser’s costs. As I wrote in an earlier post, the vendors would not have had an obligation to disclose defects in the house. However, a vendor cannot make a false statement about a condition of the house. When the vendors decided to fill out the SPIS form, it was their obligation to ensure that it was fully accurate.