If I’m interested in purchasing a home, what does the seller have to disclose to me about the property?
When you’re in the process of buying a home, it can be very easy to get caught up in the aesthetics of the structure — such as the marble countertops and hardwood floors. But elements such as foundations, wiring, plumbing, and heating and cooling systems are just as important, if not more so.
We get a lot of questions about what sellers are obligated to disclose in the course of a transaction, through their real-estate agent. And defects is an important category.
Patent defects are those that are clearly visible. Latent defects are not apparent and may not be discoverable, even by a home inspector or other expert.
Examples of patent defects include visible cracks in a foundation wall, missing safety railings or visible stains that suggest a roof leak. The seller’s representative doesn’t have to disclose patent defects to you, as these items can be found during a home inspection or are visible to the potential buyer’s eye. It’s up to you to do your own research and ask specific questions.
As an example of a latent defect, consider a home that has a history of flooding, structural or fire damage where the impact is not visible without an invasive inspection. In this case, the seller is only obligated to disclose the problem if they know about it — and if the defect could be deemed a serious risk to health and safety of those who live in the home.
This could be a structural defect that poses a risk of a wall collapsing, or a history of flooding that would foster the growth of toxic mould. These situations would require disclosure.
However, if the home has a crack in the basement foundation where water could leak through, the house may be livable, and disclosure would not be required.
And since the seller’s disclosure obligations are limited, it’s important to take steps to identify issues for yourself.
That’s where your sales rep comes in. They must take all reasonable steps to determine and disclose all facts about the property that might affect your decision to purchase, how much you may consider offering for it, or what conditions you would include. This could include asking the seller’s agent specific questions about issues that have come to their attention, inserting clauses in the Agreement of Purchase and Sale, requesting or checking for documentation, or other forms of research.
A Seller Property Information Statement (SPIS) is another way to find out more about a property. The SPIS provides information about defects, renovations and other relevant information on the property based on the knowledge and experience of the seller. However, the seller is under no obligation to complete an SPIS — so don’t assume that it will be available.
Even if a SPIS stated the home was in pristine condition, it’s better to get your own home inspection. Consulting a skilled home inspector or licensed contractor is a great way to determine if there are defects with the home’s major systems. It’s also a good idea to be present during the home inspection if you or your sales rep have any questions about the property, or if you would like to see any defects for yourself.
Remember that an informed buyer is a confident buyer. If your agent cannot answer specific questions or concerns, consider seeking the advice of a real-estate lawyer.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.