A recent decision of the Superior Court of Justice reinforces the obligation of all real estate agents to make full and complete disclosure of all material facts to their clients.

Our client Rose (not her real name) signed a listing agreement with the agent and literally a few hours later entered into an agreement for the sale of her home.

While it can be argued that Rose’s actions were perhaps precipitous and ill-advised, what Rose was not told, and what we discovered after being retained, was that the agent was also representing the purchasers pursuant to a written agency agreement.  Rose had been strongly advised by the agent to sign the sale agreement and was informed by the agent that this was the best offer that Rose was going to get.

Rose refused to close the deal.  The agent sued Rose for payment of the commission, arguing that the failure to close was Rose’s own fault.

The Court dismissed the agent’s claim.  It decided in no uncertain terms that the agent was required to disclose her dual agency in writing to Rose before presenting the offer to purchase, and that her failure to do so disentitled the agent to payment of a commission.

As if to add an exclamation point to the statement, the Court also ordered the agent to reimburse Rose for legal costs in the amount of $27,500.

For more information please call Ross Morrison at (416) 368-0600 or by email at vrmorrison@businesslawyers.com.

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