When buyers walk away from a deal because something turns out to be different than the listing said, who bears the loss? An Ontario decision. Langen v. Sharma. Gives a sharp answer: read the agreement, not the listing.
The Facts
John and Nancy Langen agreed to sell their Brampton home to Rajnish and Veena Sharma for $2.9 million. The Sharmas paid a $100,000 deposit, with closing scheduled for August 2022.
The deal collapsed when the Sharmas discovered the property taxes were significantly higher than advertised. The MLS listing showed 2021 municipal taxes of $7,297.03. A reassessment that accounted for recent renovations revealed actual taxes of $10,050. Unable to secure financing because of the unexpected tax burden, the Sharmas did not close. The Langens later resold the property at a $400,000 loss and sued for damages.
The Arguments
The Sharmas argued the incorrect tax information amounted to a material misrepresentation that entitled them to rescind the agreement and recover their deposit.
The Langens pointed to the entire agreement clause in their signed Agreement of Purchase and Sale. That clause specified the written contract was the complete agreement between the parties. And no information outside it (including listing details) could modify those terms.
The Court's Decision
The court ruled for the Langens. The entire agreement clause barred the misrepresentation claim because the inaccurate tax data appeared outside the signed agreement. The contract stood as written. Listing details held no legal weight.
The Sharmas were ordered to pay $425,319.69 in damages, and their deposit was forfeited.
The Lesson
"When in doubt, spell it out." That principle applies especially to property details that drive a buyer's decision. If something matters. Taxes, condition, fixtures, an HVAC unit that may or may not stay. It has to be in the signed agreement, not merely on the listing.
Buyers who rely on a listing detail without confirming it in the contract are exposed. Sellers who let an inaccurate listing detail go uncorrected are exposed too. In Langen, the sellers won, but only after litigation, a $400,000 resale loss, and the time and cost of fighting in court.
If you are reviewing an Agreement of Purchase and Sale and want a second set of eyes on the schedules, get a free quote. We catch the things that turn into court cases.