Seller’s Disclosure of Bids
Question: Is it allowable for a Seller to disclose information about the bids? Assume that one of the bidders is a friend of the Seller. Can the Seller say, the highest bid we have so far is $772,000.00.
Such a disclosure is not permitted by a real estate agent. It’s against the rules, but what about the Seller himself?
Answer:
Certainly, for those who feel that there is something wrong here, you are on the right track. Unfortunately, this doesn’t really come up in any of the educational programs related to the Act or the obligations of the agent.
The Seller’s conduct is actionable by the unsuccessful bidder. The Seller committed a tort (civil wrong) by disclosing confidential information, or information which a reasonable person would have believed was confidential.
The second closest bidder suffered damages. If the Seller is just plain stupid, then the agent could also be joined in the action for failure to explain and outline to the Seller his obligations to maintain this information in confidence.
So, the second highest bidder might get the property and damages too. In addition, the Seller may have to account for “profits”. That would mean if the friend paid $20,000.00 more, that amount would be turned over to the second highest bidder too. The reason is that this type of conduct is to be discouraged.
This is presently the situation. If there were a new Buyers Bill of Rights as has been suggested, then, this conduct would be legalized.
Brian Madigan LL.B., Broker
Comments 2
Is there any court precedence for this?
Author
So far, no cases civilly.
This will come up to some degree with respect to RECO disciplnary offences.
The law on this point will change when the new TRESA legislation comes into force (Part 2).