Selling a home can be both an exciting and challanging time in a homeowners life. One item that will need to be dealt with by a Canadian home seller is the Seller Disclosre Form. There have been cases of issues discovered by unsuspecting Canadian home buyers after closing on a home. Sellers may not have disclosed or been aware of problems such as mould behind walls, foundation cracks and basement flooding.
Sellers should understand that they may want to share certain types of information when selling a home and buyers would do well to take time to review a seller's disclosure. Understand more about a seller's disclosure on the sale of property in Canada.
How Does Disclosure Work?
The seller provides the potential home buyer with a Property Condition Statement (PCS) or Real Estate Disclosure Form. In the document, the seller offers details as to the condition of the property. The name of the document may vary. It is known as a Seller Property Information Statement (SPIS) form in Ontario.
In a Real Estate Disclosure form, latent defects, or those not easily observed during an inspection, that are known by the seller need to be shared with the potential buyer if the defect impacts the safety of occupants or makes the structure unfit for intended purposes. Issues that would fall under latent defects to be disclosed are:
- An illegal basement apartment;
- A history of structural, flooding or fire damage;
- Foundation cracks and problems;
- Roof water problems.
The Real Estate Disclosure Form provides some measure of notice as to current physical problems but in no way serves as a warranty. The details allow a buyer to decide whether they want to continue with the process of closing on a home. Sellers are to complete the document to the best of their knowledge. An independent investigation is often recommended to buyers. At this time, sellers are not legally required to complete a Real Estate Disclosure Form, but buyers often expect this statement to be provided and may become suspicious without its receipt.
Do Patent Defects Need to Be Disclosed?
A seller is not responsible for disclosing patent defects. These are problems that are visible to potential buyers. Visible stains that may indicate a roof leak or missing safety railings are issues that would fall under patent defects. Buyers are responsible for observing such conditions and asking relevant questions for more information.
Should Buyer's Conceal Information?
A buyer may be held liable if they do not honestly provide the information they know about the structure. Withholding information may lead to a seller having to assume liability when a buyer uncovers problems after closing. However, buyers must do their own share of due diligence when finding out more about one or more issues in a home that may have been addressed by the seller.
The Responsibilities of a Seller
Even though South Calgary home sellers are not legally bound to complete a disclosure form when selling a property, once sellers do choose to go down that route they must provide all key information, not hiding any known latent defects. A seller may want to work with their agent for help on completing the form, although it is a relatively straight-forward process. Sellers should be aware that latent defects in a structure may impact the asking price or result in buyers offering a lower purchase price.
After review of the disclosure form, buyers may also want to ask specific questions to a seller's agent, request additional documentation or want to add clauses within the Agreement of Purchase and Sale. Work with a trusted agent to learn more about the disclosure form and other documents pertaining to the sale of a property.