42 Two days after the Listing Agreement is signed Jim takes

42 Two days after the Listing Agreement is signed, Jim takes Charlotte to see several properties including 1 197 Harewood Road. Charlotte is very interested in 197 Harewood Road, a large property located on the outskirts of town. The property has a 180 foot by 200 foot lot with a century old home situated on the east side of the lot. This property is under a power of sale with a private lender. Charlotte is thinking about buying the property, moving into the century home and selling a portion of the lot (80 by 200 feet). The property has been on the market for quite a while and Charlotte has heard rumours from a number of people in the area that a battery factory used to be located next to the property and had contaminated the soil before the building was demolished. These rumours have been reported in the local newspaper. Charlotte has asked Jim to advise her about the issues that need to be addressed in making an offer and the possible sale of a part of the property Jim responds with the following statements: \"Since the property is being sold by the lender under power of sale, they would not likley agree to any warranty on the environmental condition of the site. We can make the offer conditional on a phase one audit because that would reveal if there ever was a battery factory next door. i. ii. \"If the soil is tested and there are no environmental problems, there could still be a stigma attached to the property because of the rumours and press reports. This stigma will always have a negative effect on the property\'s value and by law, you must disclose this to a potential buyer of the portion of the lot you intend to sever.\" ili. \"If the soil testing shows the lot is not contaminated, we can list the extra lot for sale and even have an accepted offer, conditional on the municipality approving the severance iv. \"If you want to purchase the property but only if the lender will pay for the severance, then you may red want to wait until you are the seller because typically, buyers of a property being severed are requt to pay for the severance, based on the OREA Agreement of Purchase and Sale.\" Which of the above statements made by Jim are correct? a Only the statements in ili. and iv, are correct. b Only the statements in i. and ii. are correct. c Only the statements in i, and iv. are correct. d Only the statements in i and ii are correct.

Solution

Answer : d. Only the statements in ii and iii are correct.

=> This is because the main contention in the case is of contaminated soil and the environmental issue. If on being tested it is proved that there are no environmental problems and the lot is not contaminated, then there does not stand any issue in the buying the lot and have counter sale of the small portion. Even through the sentiments are not good, but the current soil test can makes the things overcome of the viral rumour that adjoining battery factory has contaminated the soil.