A seller who tried to pin the legal costs of a lawsuit on his home insurance carrier because he failed to come clean on a house fire got burned in a recent court decision.
The Brampton man, Zahid Shah, was sued by the buyers of his home for withholding information regarding a fire that he had not disclosed to George and Francesco Chrysanthis in the spring of 2010.
The couple had noticed black marks on a door hinge and asked if their real estate agent if there had been a fire – which was important to them as Mrs. Chrysanthis had respiratory difficulties.
The agent spoke to Shah’s real estate agent and was told that there had never been a fire or smoke damage to the home.
But as we all know, neighbours will talk.
Shortly after the Chrysanthis’s moved in they learned that there had indeed been a kitchen fire and that the previous owner Shah had received a cash settlement to fix the damage.
Shah asked his home insurance company to defend him, claiming that he had not understood the questions that he had been asked by their agent – since he had misunderstood, he argued, he should be covered by his policy because he had made a mistake.
Not so, ruled Justice Deena Baltman. (continued.)
#pb#
She found that since all of the allegations against Shah were based on fraudulent misrepresentations, they were not covered by the policy.
“There is no plausible way to categorize the claim here as anything other than deceit,” she ruled, citing that the claims were not only about lying, but that the sellers also actively concealed the fire damage so that it would not be noticed by the buyers, agents and home inspectors.
In other cases, where it is claimed that the seller was careless in making statements about their home and the buyer suffered a loss later, the insurance company was required to defend them.
