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Get a survey before you close any deal
The Dotted Line
Can real estate deals be unwound after closing? Has the retail business philosophy penetrated real estate, allowing buyers to get their money back if a property's features have been grossly misrepresented?

That's the intriguing question recently litigated in Ontario, climaxed by a Court of Appeal decision last year.

Bruce bought Lorrie's waterfront cottage in 1989. Not only had her family owned the land for decades, her father had built the cottage in the 1930s. No survey existed until Bruce ordered one in 1993. It revealed both that Lorrie really didn't own waterfront property - a 66-foot shore road allowance separated the property from the shoreline (a common situation in rural Ontario) - and that 95 to 99 per cent of the cottage sat on that shore road allowance.

Both Bruce and Lorrie believed the cottage was located on Lorrie's property. If Bruce had known the truth at the outset, he wouldn't have bought the cottage.

Bruce unsuccessfully tried to buy the road allowance under the cottage from the township. He rejected the township's offer to rent the land for $25 a year, as Bruce then couldn't repair or rebuild the cottage if destroyed, or make any additions to it. Moving the cottage was out of the question, due to its age and construction.

Instead of string for damages, five years after closing Bruce asked the court to rescind (or nullify his deal with Lorrie, based on the legal principle "error in substantialibus." A separate negligence claim against his lawyer was on hold, pending the outcome of this case.

"Error in substantialibus" means more than just a substantial error. The trial judge called it "an error in the very substance of what is sold, an error so fundamental that it goes to the real identity and character of the thing sold. To trigger the doctrine, the buyer must end up with something totally different from what he expected to buy, and the vendor expected to sell."

Clearly, an "error In substantialibus" had occurred.

"There was a difference in substance between the nature of the thing bargained for, a summer cottage, and the thing obtained, a piece of vacant land grazed by the comer of a cottage built on township property."

Then the onus was on Bruce to justify rescinding or invalidating the transaction. Rescission is a discretionary remedy.

In rendering a decision, the court must weigh the equities of the situation, the factors both for and against cancelling the deal.

The court found both Bruce and Lorrie acted in good faith in committing their mutual mistake. Saying no to rescission would allow Lorrie to benefit from the "sale" of property she didn't own. Saying yes would force Bruce and Lorrie to "unscramble the egg" years after closing. "It would be difficult ... to restore the parties to the positions they would have enjoyed had they not closed the deal. The process ... would be inexact, complex, lengthy and expensive."
Also, this whole scenario could have been averted if Bruce had ordered a survey before closing, termed by the court the "easy, obvious and prudent step."
Unravelling the deal now would shift to Lorrie the very risk Bruce had assumed, by closing without a survey. And the finality of transactions must be recognized, too. "Vendors should be entitled to treat a final sale as final without having the transaction reversed years later because the purchaser did not bother to get a survey on closing." Despite the "error in substantialibus," the court ruled that Bruce was not entitled to rescission.
The Court of Appeal agreed with the trial judge's reasoning and rejected Bruce's appeal.
Two lessons emerge from Bruce and Lorrie's quarrel. First, having a new survey drawn is a must if one doesn't exist, or if the existing survey doesn't reflect the property’s current conditions Also, real estate closings provide closure. Deals won't be re-opened post-closing unless extremely compelling masons exist.
ALAN SILVERSTEIN
Alan Silverstein is a Toronto real estate lawyer and author. Send questions to: The Dotted Line, New In Homes, The Toronto Star, One Yonge St., Toronto, W5E I E6.

Up-to-date survey is vital - It can save a lot of confusion
With the growing popularity of title insurance in recent years, there seems to be a widespread misconception that it is no longer necessary to have a survey for a residential property purchase. Even though title insurance will, in some circumstances, avoid the need for a proper survey by an Ontario land surveyor, the fact is that aside from the deed, the survey is probably the most important document in a real estate transaction.
What is a survey? In everyday terms, a survey resembles a one-dimensional, overhead line drawing of a piece of real estate. It shows the measurements and boundaries of the land, and is prepared by an Ontario Land Surveyor using calculations taken on the ground and compared with the paper title of the property and surrounding lands on file at the Land Registry Office.
It reveals the location of the buildings on the land in relation to the lot lines, and usually shows improvements such as fences, hedges, pools, overhead wires, easements and rights-of-way in favour of neighbouring owners or utility companies. Surveys also show the location of survey bars marking the property comers.
If the document is not legible, or signed and dated by an Ontario land surveyor, it's not a survey. As well, surveys should not be confused with appraisals, which determine only the value of the property, and not the size of the lot or location of the buildings and improvements.
What happens if you don't have a survey? In a 1987 Alberta case, there were several vacant lots on a street. A purchaser bought one without a survey, and was well into construction when he discovered that the town owned the lot he was building on.
In a 1981 Ontario case, the purchaser thought he was buying a garage and adjoining laneway but a survey made after closing showed they were not covered by the owner’s deed.
Back in 1973, a purchaser was told that the lot he was buying was 10 feet wider than its actual measurements. The purchaser closed without a survey and started construction of a house encroaching five feet onto the adjoining land.
The British Columbia court awarded damages to the property owner against the real estate agent who advertised the wrong lot size.
Last year the Ontario Court of Appeal tossed out the case of a cottage owner whose building was built 95 per cent on land he didn't own. The owner failed to get a survey when he purchased the property.
A survey will help answer questions like: whose tree is on the boundary line?
Where does the city street allowance begin? Where can we build a fence? Can we install a pool under the hydro right-of-way? Is the building entirely on the land? Is part of my neighbour's house or garage sitting on my land?
Some years ago, on behalf of a client I ordered a new survey for one, of two side-by-side rural houses where the lots had been carved out of a farm. The surveyor later phoned to say that the two neighbour’s had deeds to each other's houses. Had a survey been done during construction instead of years later, the problem never would have arisen. It took months to fix up that mess.
Why get a survey if a title insurance policy protects you from not having one?
Typically title insurance ensures the state of the property as of the closing date. Title insurance ensures that the purchaser legally obtains what he
or she sees physically on the land at the time of the purchase, or will be compensated for its loss. Anything that a survey done on the date of closing would have revealed is covered by a title insurance policy. But title insurance does not tell you how far the house is from the lot lines, or where to install fences. It does not cover the ability to install a swimming pool, garage or hot tub in the future. Nor does title insurance protect the owner from damages resulting from misplaced border fences, party walls, or retaining walls.
In condominium properties, surveys are called condominium plans but they are, no less important than survey plans for individually titled properties. I have seen at least two transactions in recent years where the owners and their neighbours on the same level were occupying each other's units because no one had checked the condominium plans before the deeds were registered.
Nothing can truly replace a survey or provide, as much information to the property owner about the extent of the title. Although it costs only a tiny fraction of the purchase price, an up-to-date survey could save thousands of dollars of trouble down the road - title insurance or not.
Bob Aaron is a Toronto real estate lawyer. Send questions to Title Page, New in Homes, The Toronto Star, One Yonge St., Toronto, M5E 1E6 or by e-mail to bob@aaron.com.

TM Sunday Sun, April 6, 1998
NEW HOME BUYER'S GUIDE
Property survey an be a buyer’s best friend
A common question for the purchaser of a property is whether a new survey is required for the purchase.
Although there is no absolute answer to the question, there are some general rules and guidelines that apply in most situations.
A survey is a report by a professional Ontario Land Surveyor which will include a sketch of the property.
The sketch will show the following:
- The boundaries of the property.
- The location of all buildings and other structures located on or partially on the property.
- The location of fences, pools, decks or other evidence of occupation, and, the measured distance that all structures are set back from the property lot fines.
A survey is up-to-date if it depicts the existing status of the land including buildings and all signs of occupation. The age of the survey is not necessarily an indicator that a survey is not acceptable. So, for example, a survey may be up-to-date even though it was prepared 10 or 12 years ago, if there were no intervening alterations to the property.
There is no legal requirement for a survey and your lawyer can physically complete your purchase without one, however an up-to-date survey is always desirable and is often necessary.
Through the examination of a survey, your lawyer is able to determine whether the buildings including the house itself are located completely within the lot lines; whether the use of the property conforms to the local zoning By-Law; and, whether there are any encroachments onto the property.
Your lawyer will not be able to get the answers to the aforementioned without a survey, and if you proceed with such a survey, the certificate that you receive from your lawyer will be qualified. In most cases, you will be advised against taking the risks involved in proceeding without a survey and then asked to sign an acknowledgement to this effect.
Purchasing a home without an up-to-date survey will expose you to the possibility that your house has been built too close to the property lot line, that part of the swimming pool has been built on an easement or a multitude of other problems. Many times the problem is not discovered until you try to sell the property and the purchaser has insisted on a new survey.
If the infraction is minor it may be possible to resolve it through an application to the local municipality for a variance to the By-Law. These applications require time and money are not always granted.
If you are like most of us and need a mortgage to purchase your home, and the mortgage is with a bank or trust company, then there is an even more practical reason for a survey. An institutional lender will, in most cases, insist on an up-to-date survey for exactly the same reasons as your lawyer will advise you to get one.
The rates charged for a new survey vary, but generally the cost is between $600 and $800. It is usually possible to justify this expense when the protection that this new survey will offer is compared to the investment size. Most new home contracts obligate the builder to provide a survey to you but this is not always the case.
Your lawyer can help you avoid the problems that an out-of-date survey can cause. If you review the offer to purchase with your lawyer before you have signed it, your rights can be protected. It may even be possible to arrange with the vendor to bear the costs of the survey. Remember, that every situation is different and if you have any concerns about your rights in a particular situation, you should consult your lawyer.
Bernie Jankowski practices real estate, corporate and estate law with the Barrie firm of Oatley, Purser. If you have any questions about this article or real estate law in general, write to: That’s The Law, c/o Toronto Sun, 333 King St. E., Toronto, M5A 3X5

And the survey says…
One of the questions I get asked most often is whether a new survey is required for the purchase of a home.
Although there no absolute answer to the question, there are some general rules and guidelines that apply in most situations.
A survey is a collection of information which includes a sketch of a property prepared by a professional Ontario Land Surveyor. The sketch will show the following. the boundaries of the property; the location of all buildings and other structures located on or partially on the property, the location of fences, pools, decks or other evidence of occupation; and the measured distance that all structures are set back from the property lot lines.
A survey is up to date if it depicts the existing status of the land including buildings and all signs of occupation. The age of the survey is not necessarily an indicator that a survey is not acceptable. So, for example, a survey may be up to date even though it was prepared 10 or 12, years ago if there were no intervening alterations to the property.
There is usually no legal requirement for a survey and your lawyer may physically complete your purchase without one, however an up-to-date survey is always desirable and is often necessary.
Through the examination of a survey your lawyer is able to determine: whether the buildings, including the house itself, are located completely on the lot; whether the use of the property conforms to the local zoning bylaw; and whether there are any encroachments onto the property.
Your lawyer will not be able to ascertain the answers to the above without a survey, and the certificate that you receive from your lawyer would be qualified. In most cases you will be advised against taking the risks involved in proceeding without a survey.
Purchasing a home without an up-to-date survey will expose you to the possibility that your house has been built too close to the property lot line, that part of a secondary structure such as a swimming pool has been built on an easement, or any of a multitude of other problems. Many times the problem is not discovered until you try to sell the property and the purchaser has insisted on a new survey.
If the infraction is minor, it may be possible to resolve through an application to the local municipality for a variance to the bylaw. These applications require time and money and are not always granted. The final result may be that the sale is delayed or the deal cancelled altogether.
If you are like most of us and need a mortgage to purchase your home, and the mortgage is with a bank or trust company, then there is an even more practical reason for a survey. An institutional lender will insist on either an up-to-date survey (or survey insurance) for exactly the same reasons as your lawyer will advise you to get one.
Your lawyer can help you to avoid the problem that an out-of-date survey can cause.
If you review the offer to purchase with your lawyer before you have signed it, your rights can be protected. It may even be possible to arrange for the vendor to bear the cost of the survey.
Remember that every situation is different. If you have any questions concerning surveys or any other aspect of your real estate transaction you should consult your lawyer.

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