What to Disclose When Selling: The Importance of Honesty and Transparency

What to Disclose When Selling: The Importance of Honesty and Transparency

Posted on June 11, 2019

Jordan McGregor

What to disclose when selling can be critical to the sale of your property. The question is, what is your responsibility as a seller?

Do you have a ghost in your house? Was there a death, or a grow-op, or a flood? Asbestos insulation? Or do you have knob and tube wiring?

What to Disclose When Selling – Follow Ontario Laws

In Ontario, there’s no law that demands that you have to let the buyer know if there was a suicide, murder, or if the house is ‘haunted’. However, Realtors must abide by the Real Estate Council of Ontario (RECO) rules, so if we know about these things we must inform the buyers.

Here’s a budding issue you may be wondering about! Ontario law says you only have to disclose if the house you are selling was used as a marijuana grow-op if:

  • The buyer asks specifically.
  • There’s a resulting real material latent defect in the property.
  • Your Agreement of Sale and Purchase says it was never used as a grow op, or generally for criminal activity.
  • There is some other legal requirement to make the disclosure.

 Seller Property Information Statements

Seller Property Information Statements (SPIS) are standard forms from the Ontario Real Estate Association. They cover all the information about defects, and renovations, plus other property information based on your knowledge of the property.

An SPIS is not a requirement in many areas of Ontario, including Kingston. In fact, it asks questions that are pretty much impossible for most homeowners to answer. It is three pages long and asks things like:

  • Is the wiring aluminum, copper, or knob and tube?
  • Does the survey indicate the current location of all structures, easements, renovations, and rights-of-way?
  • Are there any registered easements, encroachments, or rights-of-way?
  • Is the property in question in line with the zoning requirements?
  • What is under the flooring?
  • Is the house under the jurisdiction of any Conservation Authority?

Although an SPIS is optional, when buyers show interest in a specific property they may ask if one is available.

Latent Defect Disclosures

Ultimately, you do need to disclose anything that makes the property potentially dangerous. A hidden flaw that could make the house unfit for human habitation must be disclosed.

This is especially important if the defect is not readily apparent on reasonable inspection. These are things like leaky or crumbling foundations, electrical problems or major plumbing issues.

So, if you know that there is a major problem that could make the property dangerous or unfit for human habitation, you must disclose. Otherwise, according to the law in Ontario, you do not have to disclose even hidden defects.

As a result, in most situations, the buyer is responsible for examination of the property. The buyer should conduct a home inspection, plus ask pertinent questions before they sign the Agreement of Purchase and Sale.

As for what to disclose when selling, follow your Realtor’s lead. Real Estate Reimaged Realtors know exactly what the laws are, and can lead you through the maze of selling. Contact us today!

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