Humber/Ontario Real Estate Course 1 Exam Practice

If a real estate salesperson mistakenly informs a buyer that adjacent land is zoned for single-family use, but it is actually zoned for light industrial use, what type of misrepresentation occurred?

1. Common mistake

2. Fraudulent misrepresentation

3. Irrelevant mistake

4. Negligent misrepresentation

5. Intentional misrepresentation

6. Misleading statement

The correct answer is: Negligent misrepresentation

The situation describes a scenario where the real estate salesperson provides incorrect information about the zoning of adjacent land, indicating that it is zoned for single-family use when it is actually zoned for light industrial use. This constitutes negligent misrepresentation because it involves the salesperson providing false information without adequate verification of its accuracy. Negligent misrepresentation occurs when a party fails to exercise reasonable care in obtaining or communicating information that they believe to be true, but which is in fact inaccurate. In this case, if the salesperson did not take the necessary steps to confirm the zoning status and inadvertently passed on incorrect information, it reflects a lack of due diligence, falling under the category of negligence. This is different from other types of misrepresentation, such as fraudulent misrepresentation, where there is an intention to deceive, or intentional misrepresentation, where the communicator knowingly provides false information. The key aspect here is that the salesperson likely did not intend to mislead the buyer but rather failed to accurately inform them, demonstrating negligence rather than intentional deceit.