The High Court has held that a homeowner is liable to pay the purchaser over $525,000 after the real estate agent told the prospective purchasers “the owner says it is not a leaky home” and that it was “built with extra care”

Those statements turned out to be incorrect and the home owner was liable for the real estate agent’s misrepresentations, because the real estate agent is the agent of the vendor of the property.  The vendor was liable despite the purchasers obtaining a pre-purchase building report and despite the fact that the purchasers had signed an acknowledgement accepting a limitation of representations and warranties on weather tightness in the sale agreement.

The purchasers also obtained judgment against the pre-purchase inspector for false statements in his report.  The Court held that an exclusion of liability clause in his company’s standard form documentation was not effective to exclude his personal liability or that of his company.

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