There are three main types of misrepresentation – Condo for rent in Singapore
- Innocent Misrepresentation: A false representation in which there is no element of fault, that is fraud or negligence.
In the local High Court case of Lie Kee Poing v. Chin Chor Yoon and Anor (1997) High Court of Singapore, it was held that the vendor’s agent had made an innocent misrepresentation, as he has truly believed that a common drain did not form part of the property. The purchaser was therefore not entitled to rescind the contract of sale but was entitled to compensation of $54,000, being the shortfall in the land area that the common drain represented. Condo for rent in Singapore.
The High Court held that the purchaser was not entitled to rescind the contract but was entitled to a reduction in the purchase price as compensation for damages. Condo for rent in Singapore.
According to the High Court:
- The legal requisition was not unsatisfactory because in the circumstances of the present case, the common property in dispute formed only 4.3% of the whole land affected, and was at the rear of the piece of the land;
- Neither the house nor any part of the garden was affected;
- The representation by the Vendor’s property agent was an innocent misrepresentation, and he had given what he honestly thought was the correct answer.
- Negligent Misrepresentation: A false representation made by a person who has no reasonable grounds for believing that statement to be true. Condo for rent in Singapore.
A real estate salesperson has a duty to use care and diligence in making correct statements about property to purchasers. Negligent conduct on his part is actionable under the law of tort. Condo for rent in Singapore.
Negligent misrepresentation arises not from the real estate salesperson’s intention to mislead or deceive the purchaser, but rather from the lack of care in ascertaining the accuracy of the information he provides to the purchaser. Many courts have concluded that real estate salespersons have a duty to act diligently and carefully and are liable for misrepresentation of fact. Condo for rent in Singapore.
The Court inNew Zealandcase of Barrett v. JR West (1970) NZLR 789 held that the defendant’s real estate salesperson who had relied on the listing particulars supplied by the vendor was negligent. Condo for rent in Singapore.
In that case, the plaintiff had specifically asked the real estate salesperson whether the house was on the main sewers. The real estate salesperson relied on the listing particulars supplied by the vendor and said it was. The plaintiff bought the house and subsequently found that the property was not connected to the main sewers.
The judge was of the opinion that the inquiry by the plaintiff should have warned the real estate salesperson that the information might be incorrect. However, he chose to disregard the warning and to affirm that the property was on the sewer. In the judge’s opinion, this amounted to failure to use reasonable care and the real estate salesperson was liable because of that and not merely because he had given incorrect information.
The crux of the judgment was that there was an inquiry and the defendant has failed to take reasonable care in responding to the inquiry. As a result, he was held to be negligent.
- Fraudulent Misrepresentation: A false representation made by a person who knowingly or without belief in its truth or recklessly, careless whether it is true or false.
A real estate salesperson must act honestly towards all parties. Fraud on the part of the real estate salesperson is actionable under the law of tort. Condo for rent in Singapore.
Fraud contains an element of malicious intent. In order for fraud to be actionable, the following elements must be shown:
- There must be a representation of a material fact;
- That representation is false; or made in culpable ignorance of its truth;
- It is made to be relied upon by a third party e.g. purchaser; and it is in fact reasonably relied upon by the purchaser; and
- Injury/Damage resulted.
Any of the following situations can constitute fraudulent conduct: Condo for rent in Singapore.
- Where a real estate salesperson knowingly makes false statements or takes actions designed to misrepresent the property and deceive the purchaser (third party). Such cases have arisen mostly commonly when the real estate salesperson states that a defective or undesirable condition does not exist, when in fact it does. An example is a claim that there are no termites when in fact there are termites.
- Where a real estate salesperson consciously has no knowledge of the truth but nevertheless makes representations without regard for their accuracy (“culpable ignorance”). An example would be where the real estate salesperson is asked if the house is connected to the sewer system and he replies in the affirmative even though he has no knowledge, or is not certain, of this fact.
- Where a real estate salesperson makes incomplete statements or representations (half-truths) by which to conceal from the purchaser a fact material to the purchase decision, or acts in such a way as to deny or limit the purchaser’s opportunity to discover a problem, or make representations which the real estate salesperson fails to correct when he discovers that they are incorrect. For example, when asked if the water seepage problem is serious, the real estate salesperson replies that it could be rectified without adding that this would cost a great deal of money.
- Where a real estate salesperson keeps silent and fails to disclose the truth of a matter which could affect the purchaser’s decision to buy. Numerous jurisdictions, such as US andCanada, have held that the failure to advise a buyer of known defects which he is unlikely or unable to discover himself constitutes a form of “passive fraud”. Under this theory of liability, the real estate salesperson may not “stand silent”. The usual remedies are rescission of the contract or damages for the loss suffered as a result of reliance on the misrepresentation. Condo for rent in Singapore.
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