I want to sell my home later this year, and I’m aware of some issues. What do I need to disclose to potential buyers?
There are a few things to consider. Some examples may include how significant the issues are, whether there are other issues you may not be aware of, and if the home is habitable. You should consider seeking professional assistance to evaluate the extent of the issues you are aware of and assess the overall condition of the property in question. With this information, it is advisable that you have your salesperson and real estate lawyer assist you to determine what you must or should disclose to potential buyers.
Should you uncover that the issues are major problems, and you don’t have the time, money or expertise to make the required repairs before you list the property, your real estate salesperson and real estate lawyer can help you decide how best to deal with them. They could propose several viable options based on the disclosure requirements applicable to your specific situation. These options could include completing a partial repair, acknowledging the issues in the listing and recognizing them in the listing price, or possibly listing the property “as is”.
What are disclosure requirements? Ontario law makes a distinction between patent defects – problems with a home that are easily observable by the untrained eye during a property inspection – and latent defects, problems that are not easily observable or even detectable, even by an expert.
A patent defect could be a large, visible crack in a foundation wall, a broken staircase, or missing bathroom fixtures, to give a few examples. Patent defects are visually obvious, so you aren’t required to disclose them to potential buyers. It is their responsibility to inspect the property.
Latent defects are a different story. As a seller, you are required by law to disclose any known latent defects that could make your home dangerous or unfit for habitation. Examples of latent defects could include a basement that floods during heavy rainfalls, a structural problem with a wall or a chronic mould outbreak. If a seller knows about a latent defect that makes the home dangerous or unfit for habitation and fails to disclose it, they put themselves at risk of being sued by the buyer.
You didn’t describe the problems you believe your home may have. I strongly recommend discussing your disclosure requirements (if any) with your salesperson and your lawyer. Keep in mind that while your salesperson is required to follow your instructions, they must also follow a Code of Ethics that forbids them from knowingly misrepresenting the state of your home if they are asked a direct question about it.
If you have a question for Joe about the home buying or selling process, please email email@example.com.
Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.