Canadian homeowners expect that a home listed at 1,400 square feet is larger than a home listed at 1,200 square feet. Believe it or not, this might not be the case.
In almost every province and territory in Canada, there are no standards when it comes reporting a home’s square foot measurements. Only one province, Alberta, has a standard for residential real estate measurements, partly because a few lawsuits prompted those involved to set some standards. The lack of a standard for home measurements makes evaluating homes challenging for prospective buyers.
For the rest of Canada, the responsibility for housing matters falls on the individual provinces and their governments. As a result, there is no way to implement a national standard when it comes to measuring and reporting the square-footage of a residential house, condo or townhome.
This is a problem, according to Kevin Klages, co-founder and CEO of Planitar, a digital technology company that creates hardware and software to capture, process and host 3D virtual home tours and provide accurate square foot floor plans.
“Buyers assume that two homes listed with their total square footage are an apples to apples comparison, when in fact they may not be,” said Klages. “One agent might have included the balcony, so when I think I’m buying 1,000 square feet of space, I may only be getting 700 square feet of living space.” While Klages accepts that these differences in measuring and reporting may be legal, he feels it’s a misrepresentation that can really cost the buyer. “The industry can get away with that because there is no standardization.”
A “small” surprise
Pam Whelan is one of these homebuyers that ended up paying for the misrepresentation of square footage on her home.
In 2007, this Calgary homeowner purchased a home that was advertised with 2,580 square feet of living space. Turns out the home didn’t have all that space. In fact, the listing Realtor at that time had relisted the home after the initial listing had expired. This expired listing reported the size of the home at 2,094 square feet — the relisted home had gained 25% more floor space, despite the lack of changes to the house. Sadly, Whelan’s agent, Larry Pritchard, did not catch the listing agent’s error. He later received a letter of reprimand. Whelan, on the other hand, ended up selling her home for $25,000 less than what she paid for it — in large part due to the home’s smaller footprint.
Whelan told CBC: “had I been presented with the more accurate square footage, I could have made a more educated guess on whether or not I wanted to proceed with purchasing the home.”
According to CBC, the Real Estate Council of Alberta found that there was “no evidence” suggesting the selling agent, Lori Clark, had intentionally misrepresented the square footage of the home. Still, Whelan paid for the mistake.
But she wasn’t alone. In Edmonton, alone, more than 1,000 complaints had been filed about inaccurate condo measurements between 2014 and 2016. During that same time period, dozens of agents were fined over square footage misrepresentations. Whelan’s case was the tipping point. That’s when the Government of Alberta stepped in and implemented measurement standards across Alberta. It was about time.
Who is responsible?
Klages argues that if you don’t have a standard, you can’t expect an agent or a developer to follow one.
At present, real estate boards are unable to penalize agents for accidental or negligent misrepresentations. If the buyer is not satisfied with this outcome, they can pursue a case of intentional dishonesty by the agent, but it’s up to the buyer (and their legal representation) to prove intent.
David Fleming, a broker at Bosley Real Estate and founder of Toronto Realty Blog, fought to have the Toronto Real Estate Board (TREB) make the square footage category in MLS mandatory for all licensed Greater Toronto Area agents. Fleming wanted one standard and one method of reporting those standards. While he didn’t get exactly what he wanted, the ability to report square footage and, more importantly, the source of that information, is now available to every listing Realtor.
Turns out most agents get the square footage measurements from old floor plans, initial builders’ plans or tax records. Unfortunately, these sources can be inaccurate, outdated documentation or may use a standard of measurement that isn’t helpful to the buyer. For instance, in almost every new build in Canada, builders will offer a floor plan that includes square footage. But what most buyers don’t realize is that these measurements are taken from exterior wall to exterior wall. So that 1,000 square foot condo may only be 900 square feet when you omit the buildings exterior, the internal framing, the insulation and the drywall.
Are Realtors experts?
In order to avoid problems and lawsuits, some boards request that real estate agents provide a square footage range. This means a Realtor can select 500 square feet to 749 square feet for any condo that’s within that range. While this is better at not providing a buyer inaccurate information it does make it hard for the buyer to make a true apples-to-apples comparison of different units.
But that assumes that agents are willing to fill out the now-mandatory square footage field in the MLS listing and provide the source of that information. Turns out many do not. Instead, an agent may fill out the square footage information and then describe the source of the measurement as N/A.
“Even when an agent knows where the number comes from, they may not understand it,” said Klages. “I do a lot of presentations for brokerages, boards and associations across Canada and the United States because Realtors want to know more about where square foot measurements come from.” Klages believes that, like buyers, real estate agents can benefit from implementing a standard of home measurements in residential real estate. It isn’t just about avoiding lawsuits. Klages believes that standardized home measures will improve sales and boost the reputation and professionalism that agents offer their clients.