What is Misrepresentation in Real Estate?
Misrepresentation in real estate occurs when a false statement of fact is made during a transaction, impacting the decision-making process of the involved parties. Common examples include incorrect property boundaries, hidden defects in the property, or exaggerated claims about the property’s value. These false statements have legal implications, especially concerning the validity and enforceability of contracts. When misrepresentation is present, the affected party may have grounds to challenge or rescind the agreement.
Fraudulent Vs. Negligent Misrepresentation in Real Estate
Fraudulent misrepresentation is rooted in deliberate deceit such as covering up water damage or failing to disclose a known termite infestation. Following are the crucial elements define this type of misrepresentation:
- The false statement was made knowingly.
- There was an intention to deceive the buyer.
- The buyer relied on the misrepresentation during the transaction.
- The buyer suffered damages as a result.
Negligent misrepresentation, on the other hand, involves false statements made carelessly or without proper due diligence such as stating that a roof is new without confirming its age. Key elements of negligent misrepresentation include:
- A duty of care owed by the seller or real estate agent.
- Inaccurate information was provided.
- The buyer relied on this inaccurate information.
- The buyer suffered damages consequently.
How Can Misrepresentation Lead to Contract Cancellation, Lawsuits, or Financial Loss?
Misrepresentation can have dire consequences, including the cancellation of contracts, legal battles, and significant financial losses. Buyers who fall victim to misrepresentation may face unexpected repair costs or diminished property values, prompting legal action to rectify these issues. Sellers and agents caught in misrepresentation cases may suffer reputational damage and financial penalties.
How to Protect Yourself from Misrepresentation in Real Estate?
To safeguard against misrepresentation, buyers, sellers, and real estate professionals should take several precautionary steps:
Conduct thorough due diligence: Verify all statements made about the property through independent inspections and evaluations.
Request comprehensive property disclosures: Ensure sellers provide a complete account of any known defects or issues.
Document everything: Maintain records of all communications and agreements to support your position in case of disputes.
By adopting these strategies, parties involved in real estate transactions can mitigate the risks associated with misrepresentation and ensure a smoother, more transparent exchange.
Our Real Estate Litigation Lawyer in Vancouver to Protect You from Misrepresentation in Real Estate Transactions
When dealing with issues of fraudulent or negligent misrepresentation in a real estate transaction our real estate litigation lawyer in Vancouver can assist you to understand and identify misrepresentation. Our legal team can further assist you in collecting and analyzing evidence to support claims of misrepresentation, such as communication records, property disclosures, inspection reports, or witness statements.
- In case you are a victim, we can file a lawsuit for damages resulting from misrepresentation that includes draft necessary legal documents, represent you in court, and advocate on your behalf.
- However, if you are accused of misrepresentation, then we can help defend against the claims, challenge the evidence, or negotiate settlements.
Often, parties may prefer to settle disputes out of court, our expert real estate lawyers can negotiate a settlement that addresses damages or rectifies the situation without prolonged litigation. If required, we can also represent your case in the court.
Book your consultation with Hoogbruin & Company’s legal team for your case evaluation.