Real Estate in BC: Misrepresentation in Property Disclosure

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In real estate transactions, parties rely on the information provided by one another to form a clear understanding of the deal.

Mutual trust and honest communication are essential for meaningful engagement among all involved. The act of misrepresentation, whether through a false statement or the omission of a material fact, undermines that trust. Misrepresentation can significantly influence a party’s decision and expose the other to serious legal consequences.

A recent decision, Sewell v. Abadian, a 2025 British Columbia Court of Appeal ruling, illustrates how courts in BC address the issue of misrepresentation by omission.

In Sewell, the seller, a former realtor, failed to disclose in the disclosure statement that an addition to the home did not have a permit, even though it was known to him. He crossed out relevant sections of the disclosure statement stating only that he had not lived in the home himself. The Court concluded that the buyer had reasonably relied on the seller to disclose everything he knew about the property. By crossing out parts of the disclosure statement, the buyer believed the seller was indicating he was unaware of the answers to those questions.

The seller’s omission was found to constitute misrepresentation, entitling the buyer to rescind the deal and recover a $300,000 deposit. The Sewell decision reinforces the legal and ethical responsibility of full disclosure in real estate transactions. It makes clear that silence or selective omission can amount to misrepresentation with serious consequences, and that courts will scrutinize attempts to obscure or withhold material information.

For anyone involved in real estate, this case underscores the importance of transparency and the potential risks of failing to disclose known issues.

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Real Estate: Misrepresentation by Phantom Bidding

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In real estate transactions, buyers rely on information provided by the sellers and their realtors to make informed decisions.

Practices like phantom bidding, where false or non-existent offers are alluded to in order to create a sense of competition, undermine that trust. This deceptive tactic misrepresents the actual interest in a property, manipulating buyers into making higher offers based on misleading information. Such behavior erodes the integrity of the transaction and can damage the credibility of those involved. Tran v. Brickman, a recent 2025 Ontario Superior Court decision illustrates how courts in Canada address issues of misrepresentation.

The seller in Tran fabricated offers, falsely communicating to the only buyer that there were other offers in play. To complete the deal, the buyer would have to increase their offer. The court found that these offers, allegedly made by other parties, were nothing more than “oral puffery.” They were not valid under Ontario’s real estate regulations, which require offers to be in writing.

As a result, these were found to be phantom bids.

The buyer was awarded $28,600 in damages under the loss of opportunity doctrine, recognizing the buyer’s lost chance to negotiate fairly. The ruling reinforced that offers must comply with real estate regulations or they could be seen as phantom bids in Ontario, leading to misrepresentation.

Ontario has taken steps to regulate phantom bidding, including rule changes in 2015 and increased enforcement. British Columbia has seen fewer formal complaints and has therefore not adopted similar regulations, instead continuing to rely upon existing ethical standards. The case law in British Columbia on phantom bidding is limited, however, there are signs of growing attention to the issue. In July 2023, real estate boards across British Columbia’s lower mainland introduced the Disclosure of Multiple Offers Presented form.

This form requires listing agents to disclose the number of offers and brokerages involved, enhancing transparency and aiming to boost buyer confidence in competitive offer situations. Transparency does remain limited, as actual offer details remain hidden.

While not a direct response to phantom bidding, it is a clear step toward increased accountability in offer presentation.

 

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