Frequently it is believed that the wording in a document governs the relationship between the parties. That’s an argument made by many industry professionals in respect to the completion of the Seller Property Information Statement (SPIS).
However, that’s really not the case. A court will look at all the circumstances. The mere fact that the SPIS document says that it is the full responsibility of the seller and the seller will fully indemnify the brokerage; doesn’t make it so.
Have a look at what the Court of Appeal said:
•· The Scherbaks submit that Ms. Weddell breached her duty of care to them by failing to provide them with adequate advice concerning their obligations to complete the SPIS.
•· They say that the SPIS was “all Ms. Weddell’s idea”.
•· They were unfamiliar with it and looked to Ms. Weddell for guidance in how to complete it, particularly with respect to answering the questions about the structure of the house and its plumbing.
•· They relied on her to their detriment.
•· First, I note that the SPIS emphasizes the importance of completeness and accuracy in statements on the form.
•· This means that, apart from anything Ms. Weddell said to them, the Scherbaks were made aware of their obligation to honestly and accurately disclose all that they knew in response to the specific questions on the form.
•· The SPIS also makes clear that it is solely the vendor who is the source of the information in the form and that the broker is not responsible for the accuracy of the information.
•· However, in my view, the wording of the SPIS is not determinative of the limits of Ms. Weddell’s duty to the Scherbaks.
The SPIS document contains fairly broad wording offering protection to the agent.
But, the Ontario Court of Appeal doesn’t accept it, nor is it prepared to apply the disclaimer to the case.
So, if you are going to use the form, use it wisely. Follow the guidelines set out by the Court.
Brian Madigan LL.B., Broker