The short answer is, possibly – but as usual, buyer beware.
The main contract that legally governs a real estate transaction is the Agreement of Purchase and Sale. In Ontario, this is usually a standardized agreement provided by the Ontario Real Estate Association (OREA). Unless the MLS listing is expressly referred to in the Agreement of Purchase and Sale, the information contained in that listing cannot be considered to form part of the contract for the property you purchased. There is a clause to this effect in the standard OREA agreement, commonly referred to as the “Entire Agreement” clause. Considering this, can a major misstatement in the MLS listing still be considered misrepresentation, entitling a purchaser to rescind the Agreement of Purchase and Sale?
Rescission is a common law remedy available where a material misrepresentation has been made that induced the other party to enter the contract (see e.g. Issa v Wilson (2020 ONCA 756)). A recent example where the Ontario courts addressed this issue is found in Lamba v Mitchell (2021 ONSC 1612). In that case, the plaintiff purchasers claimed damages resulting from the failed purchase and sale of a house, partially based on an alleged discrepancy between the actual interior size of the house and the size as described in the MLS listing. On that particular issue, the court found that MLS listing did overstate the measurements, and that this was enough to constitute a “misrepresentation that was not insignificant”. However, the purchasers had viewed the property in person, giving them the opportunity to confirm measurements for themselves. The judge expressed confidence that the plaintiff purchasers understood the size and layout of the property they were buying. Additionally, the MLS listing also included a floor plan which contained accurate measurements of the home’s interior, something which was available to the purchasers at all relevant times. Ultimately, the judge was “satisfied that the discrepancy between the actual and misstated area in the MLS listing did not constitute a material misrepresentation that would have impacted the Buyers’ decision to make an offer and enter into the APS.” The plaintiff purchasers were not entitled to rely on the misstatement in the MLS to get out of the Agreement of Purchase and Sale.
If you are intent on a specific square footage for your home’s interior or lot size, the principle of caveat emptor applies – in English, “let the buyer beware”. Information in the MLS listing is useful to get a sense of a potential property for purchase, but nothing beats touring the property in person and breaking out the measuring tape. If you are unable to visit in person, it’s prudent to make it clear to your real estate agent that the actual square footage is an important concern for you, and they are to help you confirm these measurements before making an offer. Don’t leave it for the courts to sort out later.
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