Real Estate in BC: Misrepresentation in Property Disclosure

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.