– Legally Speaking is published eight times a year by email and quarterly in print by the British Columbia Real Estate Association.
BC – Too often this column focuses on a realtor’s error or mistake resulting in the realtor’s censure by either a court or the Real Estate Council of British Columbia. Such columns, while concentrating on the negative aspects of practice, are essential in providing realtor with an understanding of the appropriate standard of care and duty expected of them in their day-to-day practice. With that in mind, it is refreshing to report that not all practice is viewed through such a negative lens.
In a recent decision of the BC Supreme Court, [1] a former client blamed their listing agent for not obtaining them substantially more money from the sale of their house. They had listed their house with several realtor with no success. The sellers chose their last realtor, whom they eventually sued, in large part because she was the listing agent for a property across the street.
The sellers listed their property for $10,000 less than the property across the street. They received an offer close to $100,000 below the listing price. They alleged that the listing agent “pressured” them into accepting the low offer.
The listing agent deposed that she had told the sellers it was up to them whether to accept, reject or counter the offer. Although not known to the sellers at the time, the house across the street sold for almost an identical amount. After accepting the offer, the sellers learned of another house in the neighborhood that had sold for almost $225,000 more than theirs.
The sale of this neighboring property was entered into a week before the sellers accepted their offer, although that sale did not become unconditional until some two weeks after the sellers had accepted their offer. The sellers deposed that they would not have accepted the offer they received had the listing agent advised them of the other sale.
The sellers claimed that the listing agent was negligent in not providing them with a comparative market analysis that would have disclosed all the properties in the neighborhood, negligent in not discovering the pending sale of the property that sold for close to $225,000 more than theirs, and in a conflict of interest by concurrently listing two competing properties across the street from each other.
The Court dismissed all of the sellers’ claims. While agreeing that the listing agent owed a duty of care to the sellers, the Court found that the sellers had not provided any evidence as to what that standard of care might be and, as such, had not established that the listing agent had breached the standard of care.
On the issue of the alleged conflict of interest, the Court concluded that there was no authority for the proposition that acting as the listing agent for two properties in the same neighborhood gave rise to a conflict of interest; if it did, the sellers had expressly waived such conflict, as they were fully aware of the other listing at the time they engaged the listing agent.
The sellers’ main complaint was that they were not made aware of the pending sale, which turned out to be close to $225,000 more than the offer they accepted. However, the Court concluded that those details would not have been available to the listing agent until after that pending sale had become unconditional, which was after the time the sellers were considering their offer.
In dismissing the claim, the Court concluded that “the defendants did not have a legal duty to obtain the best possible price for the property. Rather, a realtor has an obligation to act in accordance with the applicable standard of care for giving advice on price for a property.”
It is not unusual for sellers or buyers, with 20/20 hindsight, to conclude they should not have entered into a particular transaction and to claim that their realtor “pressured them into entering into the agreement” or conversely that their realtor “should never have allowed them to enter into the agreement.”
It is the realtor’s function to make sure that their client has all pertinent and available information before them, so that the client may make an informed decision. It is not the realtor’s function to make that decision for them.
Brian Taylor
Norton Rose Fulbright LLP
- Currie v. Sonnenberg, 2017 BCSC 526.
