A Homebuyer is Permitted to Rescind an Agreement of Purchase and Sale after Being Misled about the Size of the Property

  • April 05, 2021
  • Daniel Waldman, Pallett Valo LLP

A recent case involving a real estate transaction gone awry confirmed an often-used but seldom successful remedy; namely, that a written contract can be voided based on a prior oral representation.  In Issa v. Wilson, 2020 ONCA 756, the Ontario Court of Appeal affirmed that a buyer can get out of an Agreement of Purchase and Sale when they were induced into entering the contract by misleading information.

In Issa, a young, first-time homebuyer retained the services of a real estate agent to assist him in purchasing a home to live in with his family. The agent informed the buyer that the size of the home was over 2,000 square feet. In obtaining this information, the agent relied on a representation made by the vendor of the property, as well as the Multiple Listing Service (“MLS”) listing of the home from 12 years earlier. However, the agent did not carry  out any measurements to verify the square footage of the home.

The buyer was given the opportunity to visit the property and inspect it to verify these representations before executing the purchase agreement.  The buyer met with the vendor of the property during his visit and was again informed that the home was about 2,000 square feet. Relying on the information provided by the agent and vendor, the buyer executed an Agreement of Purchase and Sale and provided a deposit.