Misrepresentation of Condo Fees

Background

In a recent real estate transaction at Calgary, a buyer encountered a significant issue regarding the misrepresentation of condominium fees. The property was listed on the MLS with incorrect condo fees, leading to a dispute between the buyer's and seller's brokerages.

Key Issues

• Inaccurate MLS Listing: The condo fees were misrepresented by $44.75 per month. Additionally, a $25 monthly increase was not disclosed to the buyer before or after the removal of conditions.

• Failure to Disclose: The listing agent did not ensure the fees were accurate, nor did they notify the buyer of the fee increase prior to completion day, violating Section 6.2 of the contract's Representations and Warranties.

• Condo Document Review: While the buyer chose not to include a formal condominium document review condition, the seller's agent still had a responsibility to provide correct information.

Broker Responses

• The buyer's brokerage requested $840 in compensation, representing the total fee increase over 12 months.

• The seller's brokerage declined the request, arguing that the buyer had the opportunity to delay closing to review the condominium estoppel documents, which would have confirmed the correct fees.

• The buyer’s brokerage maintained that the listing agent's lack of diligence directly contributed to the misrepresentation.

Resolution

The buyer ultimately decided not to pursue a formal complaint. However, the case underscored the importance of accurate MLS data and agent accountability. Clear communication and proper due diligence are critical to maintaining professionalism and trust in the industry.

Lessons Learned

1. Ensure Accurate Listings: Agents must validate all information, particularly condo fees, before listing a property.

2. Document Review is Crucial: Even when buyers waive a formal document review, agents should ensure that fees and any recent changes are disclosed.

3. Transparency Matters: Sellers and agents must communicate any fee adjustments promptly to avoid post-transaction disputes.

4. Legal and Ethical Responsibility: Misrepresentation can lead to financial disputes, reputational damage, and potential legal consequences.

By maintaining diligent practices and clear communication, real estate professionals can prevent similar conflicts and build stronger client relationships.