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Court Says Measurement Error Not Fatal

What happens if a purchaser finds a property is actually smaller than advertised by 18%? 

A B.C. Court had to decide that very issue, when Bruce and Karen Meagher bought a house in New Westminster, B.C. from Mrs. Fraser.  The house was advertised online by the realtors as having 2706 square feet.  The listing accurately set out the size of all the rooms in the house, but the house was actually 500 square feet smaller than advertised. 

The house was listed by Mrs. Fraser for $329,800.00, but the market was extremely hot at that time. The Meaghers really liked the house as it met all the requirements as to location, privacy, number of rooms and bathrooms, room sizes and price range.  Their price range was $320,000.00 to $340,000.00. 

Based on their realtor’s advice, the Meaghers offered $340,000.00 for the house without any conditions.  Mr. Meagher later acknowledged that he was prepared to pay more than the listing price because the market was so hot, and they really liked the house. 

The problem arose when the Meaghers got an appraisal, and it came in at $320,000.00.  The Meaghers went ahead and closed the deal anyway. 

After they closed the deal, the Meaghers sued the listing agent, the seller, and the brokerage because the advertised square footage was 500 square feet less than advertised.  They sued for $20,000.00, being the difference between the appraised value of $320,000.00, and the price they paid which was $340,000.00. 

Unfortunately for the Meaghers, the Judge did not agree with them and dismissed their case.  The Judge ruled that the Meaghers did not buy based on so much a square foot.  They bought the house on their inspection of it and because it met the requirements. 

The moral of this story is that if the actual size of a property is important to a buyer, a clause should be inserted into the Purchase Agreement stating that the size is warranted, and adjusting the price if the square footage falls short. 

Paul G. Pharo, Q.C.  is a Lethbridge Lawyer.