Lessons from RECO: Lot sizes and damages | Harjot Atwal

Law360 Canada (January 13, 2025, 10:04 AM EST) --

Harjot Atwal

“It's not the size of the dog in the fight, it's the size of the fight in the dog.”— Mark Twain

To make the foregoing quote more applicable to my purposes, assume I consider at least the first instance of “dog” to be interchangeable with “real estate.” Perhaps the second instance could be interchangeable with “doggone litigant”? Further playing with the introductory quote may ensue, but basically, mistakes in lot sizes noted in an agreement of purchase and sale (APS) can lead to litigation fights. This makes sense (hopefully).

For example, if your purchase of a property was being done to subdivide it into two lots, each of which could have a separate property built on it and then separately sold to different third parties, even the least dogmatic of individuals may be perturbed if the lot size was misrepresented and not actually large enough to support such a subdivision in accordance with zoning bylaws and requisite standards.

Indeed, you may even doggedly pursue the seller in court for damages for having induced you into a transaction for which you did not think you were originally bargaining if it closes, or the seller may litigiously pursue you as the buyer in the hopes of keeping your initial deposit if the transaction is terminated before completion.

This is the fifth and last in a series of articles about various ways in which my knowledge of residential real estate has been enriched by my pursuit of a realtor license with the Real Estate Council of Ontario (RECO). The series addresses shared wells and rural real estate, condominiums and Kitec plumbing, asbestos and urea formaldehyde foam insulation (UFFI), disclosure of septic systems, and lot sizes and damages. A further series will be written when I complete the commercial real estate part of the RECO course currently offered by Humber College.

Dog puns aside for now (and I like dogs!), we should first consider s. 5 of the Trust in Real Estate Services Act, 2002 which states:


Not only do registrant realtors need to be concerned about accuracy and avoiding misrepresentation, but sellers and buyers need to be cautious too. This applies just as much to lot sizes as it applies to misrepresentations regarding toxic insulation, septic systems and Kitec plumbing.

For this article, I will use the sample case studies mentioned in Course 2, Module 15 of the RECO materials. In the standard boilerplate APS used in Ontario, the Real Property section on the first page mentions “having a frontage of x more or less by a depth of x more or less.”

Using the words “more or less” allows minor discrepancies in lot sizes to exist, which both the buyer and seller are deemed to accept unless something to the contrary is written in Schedule A of the APS that supersedes the preprinted wording. Lot size should still be verified, of course. In an ideal world, an Ontario land surveyor would be retained for every transaction occurring to provide verified dimensions for a property in addition to an up-to-date survey.

Yet, our world being murky and full of gray areas, let’s first consider two cases — one where the seller loses a claim for damages, and one where the seller wins.

In the first case, a property was bought with the intent to subdivide it, but the boundaries were not easily knowable since there were no visible markings like a fence to demarcate them. The seller identified the lot size in the APS as having a depth of 180 feet more or less, but the actual depth was later discovered to be 154 feet, which was not sufficient to allow for the lot to be subdivided based on zoning bylaws.

Accordingly, the buyer refused to close, and the doggone seller litigant sued, having lost profits when re-selling to a third party for a lower purchase price (the difference in which was not covered by the deposit retained from the original buyer). The judge ruled in favour of the buyer, since the exact measurement was important given the specific intent to subdivide the lot, and since it was decided that “more or less” did not cover a difference of 26 feet (being 14.4 per cent of the originally indicated lot size) especially since there were no fences or demarcated boundaries to assist with a visual inspection.

In the second case, a buyer refused to close a transaction, since a property had been incorrectly stated as having depth of 138 feet, whereas in reality it was only 120 feet. Again, there was a sale to a third party on termination of the original APS, and a lawsuit ensued with respect to the differential damages between the original purchase price minus the deposit and the third-part APS purchase price.

Here, the judge ruled in favour of the doggone seller litigant. Why? The buyer had the opportunity to view the property, verify the actual size of the property and the fact that the rear yard was bounded by a cedar hedge meant that no deception existed as to the true depth of the lot.

A further issue that can arise is if the words “to be verified” are indicated next to the depth. But verified by whom? Such wording should always be made very clear. Unless the exact wording chosen is that it is “to be verified by the buyer” or “to be verified by the seller,” courts may very well look to other factors such as the percentage discrepancy in the lot size when making their final determinations as to which party is liable to pay the other for damages.

The preceding analysis shows a fact-based inquiry is very important here — whether they are facts pertaining to stated versus actual lot sizes, percentage discrepancies, opportunities for inspection or demarcated boundary lines — and so the following Mark Twain quote is as good as any for a parting thought: “Get your facts first, and then you can distort them as much as you please.”


This is the fifth part of a five-part series. Part one: Lessons from RECO: Shared wells and rural real estate; part two: Lessons from RECO: Condos and Kitec plumbing; part three: Lessons from RECO: Asbestos and UFFI. Part four: Lessons from RECO: Disclosure of septic systems.

Harjot Atwal is a real estate lawyer. In 2023, he opened up his own shop, Atwal Law Firm. For legal matters, you can reach him via email at harjot@atwallawfirm.ca. He is also a mortgage agent (level 1) with Pineapple Financial Inc. (FSRA #12830) and currently pursuing his realtor licence with RECO. His phone number is 647-967-6548, and you can also reach him on LinkedIn.

The opinions expressed are those of the author and do not reflect the views of the author’s firm, its clients, Law360 Canada, LexisNexis Canada or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

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