Breached Agreements of Purchase and Sale: Can I Recover My Losses?
Many Real Estate transactions wind up breaking down between the point where an Agreement of Purchase and Sale has been signed and the transaction is completed (“closed”). In such cases there are very often financial losses for both parties.
Depending on who is at fault, there are avenues for the vendor or purchaser to recover damages from one another. In some cases, either party may also have other avenues to recover losses from somebody else.
In most transactions, the parties are represented by Real Estate Agents. Depending on the level of sophistication of the person being represented, the agent has certain fiduciary obligations which, if breached, may cause the agent to be liable for the client’s damages.
Your agent has an obligation to act with reasonable skill and care in reviewing the terms of a purchase agreement with you [Wemyss v. Moldenhauer  S.C.J]). If you were forced to breach your Agreement due to some misunderstanding that was caused by an act or omission by your real estate agent, then you may wish to seek legal advice about your various potential avenues to recover your losses.
Furthermore, agents usually represent larger organizations such as brokerages or agencies. Under normal circumstances these organizations are vicariously liable for the actions of their agents while they are acting in their capacity as agent. In other words, if this fiduciary obligation is breached, you may be able to recover damages from your Real Estate Agent.
For example, if you breach your agreement because you neglected to ask for a home inspection, and your Real Estate Agent never suggested that you do so or never discussed with you the risks of not having the home inspected, then you may have a viable case against your agent. This is because your agent’s duty of care includes “the disclosure of material facts about the property to his principle” ([Malpass v. Morrison, 2004 (ON S.C.)].
As always, litigation can be quite onerous, and this is only an appropriate avenue for individuals who were actually misled by their Real Estate Agent, and who actually didn’t know better at the time, and who actually suffered damages as a result.
Our lawyers work together with your agent to ensure that your real estate transaction is a smooth success. Contact Levy Zavet today to hear more about how we can make your next Real Estate transaction hassle-free, and for all of your Real Estate needs.