Does the seller need to disclose the fact of a nudist beach next door?
According to the courts, no. The seller has no obligation to disclose this fact as it is not considered a defect.
In the judgment of Summach et al v. Allen et al the judge stated: “The presence of a nude beach next door but one to the subject property is not a defect, latent or patent. There is no duty on the vendor to disclose the existence of the nude beach.”
“The presence of nude bodies next door or parading in front of one’s house may or may not be a defect. This requires a subjective test. To allow defects to be determined by individual preferences would open the floodgates of litigation by remorseful purchasers and create an impossible standard of disclosure for vendors. In this case, the alleged defect was occurring outside the boundaries of the property purchased.”
The summary of the details of the case are as follows:
The respondent vendors and the appellant purchasers entered into a contract for the sale of lake-front property in Kelowna. Four days after the vendors accepted the purchasers’ offer the vendors indicated they there were interested in amending the contract to include a condition relating to the use of a dock on the property. Before the purchasers responded to the vendors and before they were to take possession of the property the purchasers learned from a neighbor that the adjoining property which was next door to a public park was being used in the summer as a “nude beach”. They learned that sexual activity took place on a nearby dock.
The purchasers refused to close. They stopped payment on the cheque issued for the down payment. The vendors sued for the down payment.
The issues before the trial judge were whether the attempts by the vendors to amend the contract, and/or the non-disclosure of the use of the near-by beach entitled the purchasers to escape their obligations under the contract. The trial judge found against the purchasers on both bases.
However the purchasers would have had a case against the realtor if there was one, as the realtor is bound by their Codes of Ethics which is part of Regulation 580/05 of the Real Estate and Business Brokers Act, 2002) that require all registrants to deal with these property disclosure issues.
Some are as follows:
Fairness, honesty, etc.
A registrant shall treat every person the registrant deals with in the course of a trade in real estate fairly, honestly and with integrity.
Best interests
A registrant shall promote and protect the best interests of the registrant’s clients.
Inaccurate representations
A registrant shall not knowingly make an inaccurate representation in respect of a trade in real estate.
Error, misrepresentation, fraud, etc.
A registrant shall use the registrant’s best efforts to prevent error, misrepresentation, fraud or any unethical practice in respect of a trade in real estate.
Registrants must also disclose material facts to clients and customers, as noted in Section 21 of the new RECO Code.
