5 Things to know about square footage I have received calls from buyers and real estate agents
complaining about finding out that their home or condominium had less square
footage than was represented on their original MLS® listing.
My immediate thought was "did the home shrink after closing?" In
other words, if the square footage was really important to you, why didn't
you measure it yourself before you bought the home?
Here are 5 lessons to remember about square footage:
1. When you buy from builder plans, nothing is guaranteed
Some builders attach plans with square footage to their agreements, other
don't. Even if the plan is attached, The Tarion Warranty Programme permits
registered builders to make errors up to 2% and unfortunately, there are no
penalties if the error exceeds 2%. While buyers can request a price
adjustment if the error exceeds 2%, in my experience, most builders will not
agree with this. In addition, there is confusion as to whether the
measurements are just for interior living space or whether it goes to the exterior
walls, and it may not account for pillars or other obstructions inside the
unit.
So even if you are relying on builder plans when figuring out the square
footage, there may be errors in them.
2. Buyers may be able to sue if the difference is substantial
The case law has gone both ways as to whether a buyer can successfully sue if
they find that the seller misrepresented the square footage and the
difference was substantial, say over 10%. In some cases the listing brokerage
was held responsible for not properly verifying the information. But it is
not guaranteed.
3. Will disclaimer clauses protect sellers and real estate
salespeople
A disclaimer clause will likely protect a seller from liability, unless they
knew the information was false and gave it out anyways. However, a real
estate salesperson is required to do their due diligence. That does not mean
that you can just copy the square footage from an expired listing. If you do
not do any due diligence, you may still have violated the Real Estate Council
of Ontario Code of Ethics, even with a disclaimer clause.
4. If you are acting for the buyer, ask how the seller came
up with the square footage
While buyer salesperson can normally rely on a listing salesperson to conduct
due diligence, it is a good idea to always ask where the number for the
square footage came from. Was it on plans, through MPAC or just from a prior
MLS® listing when they bought in the first place? In addition, if you see a
disclaimer clause, explain this to the buyer and consider having the property
measured by the buyer themselves for verification.
5. If you are not sure, just measure it yourself
It is easy to be fooled when it comes to square footage. Professional home
stagers are experts at making rooms appear larger than they are by the
furniture that is used. If you are acting for a seller, discuss with the
seller the advantages of hiring a professional to verify the square footage
before putting the home on the market. If you are acting for a buyer, ask them
if the square footage is important to them, and if necessary, take the time
to do some of the measurements with the buyer to make sure the area is close
to what is being represented.
By asking the right questions both before listing and during the offer
negotiations, there should be no complaints or claims about square footage
after closing.If you have any stories to
share about the GTA housing market or just need some advice, please contact
me at mark@realestatelawyers.ca
Same rules apply when your two car garage has an interior hall closet protruding into the garage space or a staircase and landing added inside the garage to deal with the elevation [height] of the garage that renders your two car into a single car garage.
The plan and elevation drawings [and municipal tax department] now indicate you have a two car garage where two cars cannot fit.
Good advice from Mark Weisleder
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