Slander of Title
If we are concerned about the law of torts and its application to situations arising in real estate transactions, let’s not overlook “slander of title”. There are some basic elements to this tort.
You will recall that a tort is an actionable wrong. It is quite similar to a crime (on the basis of the facts), but it is civil in nature. This permits the victim to institute an action (lawsuit) in Court and seek compensation. The same fact situation may give rise to a criminal charge, but the offender is punished, pays a fine or goes to jail, generally, there is no measurable compensation for the victim.
So, this begs the question: how can someone injure your property “just by words” or “by deeds” without trespassing or physically damaging it in some way. Well, the answer seems to be simply by making an untrue statement.
The basic elements of the tort of “slander of title” appear to be:
1) The statement is untrue or false,
2) The statement is made knowingly and intentionally,
3) There must be actual harm to the owner of the property.
You can speculate as easily as I concerning what circumstances might qualify. Consider an agent who states that a particular house is “haunted”, thereby discouraging potential buyers. Perhaps the agent says that it was (or had to be) a marihuana grow house, when there’s no real evidence of that. Maybe there was indeed some mould, but simply stating that there was mould is factual. Stating that is was a grow house is pure speculation. In respect to the sale of a business, and agent may say that all the customers are leaving, the service is poor, the goods sold are below par. All of these comments are unfounded and not supported in any way by the facts.
So, how is this a problem?
John wants to sell his restaurant. He goes to Sam (an agent) whom he knows who sells houses and generally focusses on the residential side of the business. He decides to list with David who specializes in the sale of restaurants. Sam is not happy that he lost the listing. He attends an agent’s open house in the morning at the restaurant a decides to ”bad-mouth” the restaurant. He says the food is poor quality, the service is lousy and the customers are not coming back. Sam basically, has nothing to gain, but his companions from his brokerage all believe his statements to be true. In fact, the restaurant has been in operation for 15 years and he hasn’t been inside for the last 5 years.
If John can show that Sam maliciously spread false statements about the restaurant to his colleagues, then, that would constitute slander of title.
Brian Madigan LL.B., Broker