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Did you know that Sellers (and their real estate agents) have a duty to disclose any defects in a property that might affect a buyer’s use and enjoyment of that property? There are two kinds of defects:
- Physical defects are the kinds of defects you can see. Generally, when you buy a house, you buy what you see – including the door with the missing doorknob and those scratched hardwood floors. Physical defects don’t have to be disclosed – a buyer can see them.
- Latent defects are hidden and can’t be seen under normal inspections. The law says that if the Seller knows about a latent defect that makes the home either uninhabitable by the Buyer; unfit for the Buyer’s intended purpose; or dangerous, then the Seller must disclose this defect. In addition, the Seller cannot intentionally conceal what would otherwise be a patent defect.
What kinds of things should a Seller disclose?
- That leak in the basement every spring.
- The fact that your home inspector told you there were termites in the basement when you bought the house and you didn’t bother to treat for them.
- The knob and tube wiring in the house.
- That the neighbour is an illegal rooming house and someone was murdered there last year (true story – click here for the details)
- The fact that someone died in the house.
- That the great addition to the house was added without building permits.
- The fact that the basement apartment is illegal. (click here to find out if you need a building permit).
- That you have lead in your drinking water.
If you’re a Buyer, ask the Seller if they’ve signed a SPIS – Seller Property Information Sheet – the official document to disclose what you know about a home. And if you’re a Seller, completing a SPIS can save a lot of headaches (and money) later – you have proof that you disclosed everything you know about your home. Note: SPIS completion is rare in Toronto, so don’t be surprised if the Seller hasn’t completed one.
If you’re not sure you should disclose something…chances are that you should disclose it. If you were buying the property, is this something you would want to know? Might it affect the Buyer’s enjoyment of the house – and come to haunt you in a lawsuit?