What Has to Be Disclosed When Selling a House Canada
When you are selling your home, it is important that you follow any necessary laws and protocols to avoid trouble later down the road. There are certain things that you must disclose to your buyers, and you also want to avoid giving them any false answers to their questions or misleading them. If you do this, buyers can take legal action against you. Read on for a guide of what you do and do not need to disclose if selling your house in Canada.
- What Has to Be Disclosed When Selling a House Canada
- What Is Required to Be Disclosed?
- What Is Not Required to Be Disclosed When Selling a House
- Sellers Proprietary Information Statement
- Additional Disclosures
- Frequently Asked Questions
What Is Required to Be Disclosed?
When you are selling your house, there are certain things that must be disclosed to your buyers by law. There are other things that should be disclosed for the sake of honesty and transparency but are not technically required by law.
It is required by law that you disclose any sort of latent defects to potential buyers, especially those that would make the home uninhabitable, dangerous, or unfit for the buyer’s needs and purposes. Latent defects are the kind of defects that are not visible or apparent to the buyer, and may not even be easily discovered by a professional home inspector. Due to this, there are also cases where a homeowner may be unaware of any latent defects, too.
Some examples of latent defects are structural defects or those caused by fire or flooding. If you do know about any latent defects in your home, this must be disclosed, or you could be accused of fraud by a buyer. This is especially important to let a buyer about if the defect has the potential to affect their health or safety. If an owner does not know about a latent defect, to begin with, however, they would not be held accountable.
Other examples of latent details include the following:
- Asbestos or mold
- Termites or other infestations
- Conditions of any wiring
- Basement leakage, especially if it occurs seasonally
What Is Not Required to Be Disclosed When Selling a House
There are some additional details when selling a house that is not required to be disclosed– at least, not under any sort of law. It is important to note that, if a buyer asks, you should not give them a false answer, and many of these factors should still be disclosed as a courtesy and for the sake of honesty. If you were to outright lie to a buyer or misrepresent the property in some way, they could accuse you of fraud.
Patent defects are different from latent defects in that they are easily visible and obvious damages or defects to a property. These types of defects can be seen by anyone who is viewing the property, including owners, buyers, and professional home inspectors. Therefore, a homeowner is unable to easily conceal them as they could with latent defects.
Certain examples of patent defects are visible cracks or stains, or missing items, such as a broken fence or stairway railing. As mentioned previously, it is not required that the seller or the real estate agent disclose any sort of patent defects, since a buyer can see them for him or herself.
Death In the Home
If a person has died in the house, this is likely something a person would want to know before they buy. However, there is no law that states this information must be disclosed to a buyer– even if this death was caused by violent means or by suicide. That being said, it is ethical to make a buyer aware of this type of information during negotiations. If a buyer asks you directly about a death in the home, you, of course, must tell them the truth.
When it comes to realtors, though, they may have to disclose this information to a buyer. Realtors work under different real estate organizations, which govern them and have specific rules and regulations. Your local real estate organization may have binding regulations that obligate your agent to disclose information about a death in the house, so this is something you may want to discuss with your agent.
Sellers Proprietary Information Statement
The Sellers Proprietary Information Statement is a document that may be requested by a potential home buyer. It may also be required of an agent by their real estate brokerage when you have a potential sale on the home. A Sellers Proprietary Information Statement, or SPIS, can legally bind a seller once the form has been fully filled out. For instance, if there are latent defects in the home and these are not disclosed and not reflected in the SPIS, the buyer would be able to take legal recourse against the seller. This document helps a buyer to hold a seller responsible for any sort of negligence in regards to incorrect or misleading information.
Is a SPIS Required?
ASPIS is not required by law, so while a buyer may request one, it is not required in order to complete a sale. In fact, a seller and realtor may even refuse to fill one of these out if they do not wish to. This may be the case when the market is hot and they are able to simply move on to the next buyer. One of the reasons that a seller may want to avoid filling out this document is that it is very complex and can be confusing. You would certainly not want to fill this out wrong, in error, and be held liable for your mistake.
In some cases, it can be even more difficult to fill out an SPIS because you, as the seller, may not have enough information to do so. One such case is if the home had been rented previously, and the seller does not have the required knowledge about its physical condition.
There are also some more unusual or uncommon things that may be disclosed to buyers when viewing the home or negotiating the sale. However, these typically do not need to be required by law– it is important that you speak with your agent to ensure that you understand any differences in your local laws.
If the home was previously used as a grow operation for marijuana– and if you are even aware of this history in the first place– you may want to let a buyer know, but you are not required to. Though, if a buyer asks, you should answer truthfully. This may be important information because the operation could have caused defects within the home. A buyer may also request proof that any such defects have been fixed or will be fixed. With grow operations, law enforcement typically records any grow operations they discover, but they do not discover all of them. A buyer may therefore come into the viewing already aware of this information and of the home’s past.
If the seller or realtor is aware of any criminal activity that happened in the home, this may be required to be disclosed. While it is not required by law, it may be required of the realtor by their local real estate organization. If so, they are required to inform the buyer of this history before a sale is completed– usually during negotiations, rather than during a viewing. Of course, a seller or realtor may not be aware that any criminal activity occurred in the home, and if this is the case, they would not be held liable for misrepresenting the property. Criminal activity in the home could refer to a murder on the property, using the space as a drug lab or a brothel, or any other related event or stigma. Using property in this way can also lead to damages within the home, so it could be important for buyers to have this information.
Frequently Asked Questions
What do you have to disclose when selling a house?
If there are any known defects or issues with the house, you should disclose this. Otherwise, buyers could accuse you of fraud and have the grounds for legal action.
It would be at your advantage to disclose things like new windows, new doors, new flooring or new bathroom fixtures.
What must sellers disclose?
It is required, by law, that sellers disclose any latent defect that could make the home uninhabitable, make it unfit for a buyer’s purposes and needs, or make the home dangerous.
Do you have to disclose bad neighbours when selling a house in Canada?
While it is not explicitly stated that you have to disclose bad neighbours, you must disclose any latent defect that would make the home uninhabitable or unfit for the buyers’ needs, if the defect is something that you are aware of. However, if there have been neighbour disputes, rather than just having neighbours that annoy you, this is something that you should disclose to buyers.
What happens if sellers don’t disclose something?
If a seller did not disclose something, such as a defect, or actively tried to hide it from buyers, they could be accused of fraud. The buyers could then choose to take legal action against the seller, as these sorts of disclosures are legal requirements.