What Every Seller Needs to Know About Ontario’s Disclosure Requirements

What Every Seller Needs to Know About Ontario’s Disclosure Requirements

Essential Information for a Smooth Transaction

Selling your home is an exciting milestone, but it also comes with legal responsibilities you cannot overlook. One of the most critical aspects of selling real estate in Ontario is disclosure—the process of informing buyers about any known issues with the property.

You might assume that buyers are responsible for uncovering problems through inspections, but that’s only partially true. While buyers are expected to conduct their due diligence, sellers must disclose certain defects and material facts that could impact the value or safety of the home. 

Whether you’re selling a historic home with past repairs or a newer property with hidden issues, knowing what must be disclosed can protect you and provide buyers with the transparency they expect.

Distinguishing Between Patent and Latent Defects

In Ontario, property defects fall into two categories: patent and latent.

Patent defects are visible issues that can be identified during a standard property inspection. Examples include cracked windows, peeling paint, or damaged flooring. Sellers are not legally required to disclose these types of defects, as buyers are expected to discover them through due diligence. However, sellers should not attempt to hide patent defects, as doing so could lead to legal disputes.

Latent defects, on the other hand, are hidden issues that are not easily detectable during a regular inspection. These could include foundational problems, mould inside walls, or previous water damage that has not been properly repaired. If a latent defect makes the property unsafe or uninhabitable, sellers are legally obligated to disclose it. Failing to do so can result in legal action from buyers after the sale.

The Role of the Seller Property Information Statement (SPIS)

The Seller Property Information Statement (SPIS) is an optional disclosure document that sellers can complete to provide buyers with additional information about a property. It covers details like structural issues, past repairs, and environmental concerns. Some sellers choose to use this form to create transparency and build trust with potential buyers.

While the SPIS is not required by law, any information included in the document must be truthful. If a seller knowingly misrepresents the property’s condition, they could be held liable for any resulting issues after the sale. Those unsure about how to complete the form should consult a real estate professional before providing any information to buyers.

Legal Obligations Under the Trust in Real Estate Services Act (TRESA)

The Trust in Real Estate Services Act (TRESA), updated as of December 1, 2023, has introduced stricter disclosure rules for sellers and their agents in Ontario. If a seller is legally required to disclose a fact, and their real estate agent is aware of it, the agent must disclose it to all potential buyers. This rule is designed to protect consumers and prevent misinformation during real estate transactions.

TRESA also requires agents to act with transparency and fairness throughout the selling process. Any attempt to mislead buyers, either through omission or false statements, could lead to disciplinary action. This reinforces the importance of honesty when listing a home for sale.

Material Facts and Disclosure Requirements

A material fact is any piece of information that could reasonably affect a buyer’s decision to purchase a property. In Oakville, sellers must disclose material facts that impact the home’s value or livability. Examples include the presence of asbestos, unresolved structural issues, or zoning changes that could alter the neighbourhood.

Sellers must also be aware of buyer inquiries regarding a home’s history. If a buyer directly asks about a past event, like a fire or significant renovation, the seller is required to answer truthfully. Providing false or misleading information could lead to legal consequences after the sale is completed.

Understanding Stigmatised Properties

Unlike physical defects, stigmatised properties are those with non-physical characteristics that may impact their desirability. Common examples include properties where a violent crime or death has occurred, homes with a reputation for paranormal activity, or former drug labs.

Ontario law does not require sellers to disclose stigma-related issues unless a buyer specifically asks. However, if a buyer directly inquires about a property’s history, the seller and their agent must answer honestly. While not all buyers will be concerned with a home’s past, some may consider this information crucial when making a purchase decision.

How Non-Disclosure Can Impact Sellers

Failing to disclose the required information can have serious consequences. If a buyer discovers an undisclosed latent defect or material fact after purchase, they may have legal grounds to take action.

The potential consequences of non-disclosure include:

  • Contract Termination – If a buyer can prove that the seller deliberately withheld critical information, they may have the right to cancel the transaction.
  • Financial Liability – Sellers could be required to cover the costs of repairs or compensate the buyer for losses resulting from undisclosed defects.
  • Legal Disputes – A buyer who feels misled may file a lawsuit, leading to costly legal proceedings.
  • Reputational Harm – A legal dispute could negatively impact a seller’s reputation, making future property sales more difficult.

Steps to Take Before Listing a Home in Ontario

Before putting a home on the market, sellers should take proactive steps to meet disclosure requirements. A thorough approach can prevent surprises and create a smoother transaction process.

First, it’s a good idea to arrange a pre-listing home inspection. While buyers typically conduct their own inspections, a seller-initiated assessment can help identify potential issues before they become deal-breakers. Sellers should also gather relevant documentation, including records of past renovations, insurance claims, and permits. Having this information readily available can speed up the selling process and make the home more appealing to buyers.

Consulting a real estate professional is another important step. A knowledgeable agent can provide guidance on what must be disclosed and help sellers navigate Ontario’s real estate regulations. Professional advice is particularly valuable for those unsure about how to handle complex issues like latent defects or material facts.

Partner with The Invidiata Team

Selling a home in Ontario is a significant transaction, and expert guidance can make all the difference. The Invidiata Team provides top-tier service, market expertise, market exposure and a commitment to ensuring every seller has a seamless experience.

From understanding disclosure requirements to marketing your property effectively, The Invidiata Team is here to assist. Contact them today for professional advice and a tailored selling strategy that maximizes your home’s value.

Request a personalized home valuation here.

What Every Seller Needs to Know About Ontario’s Disclosure Requirements
What Every Seller Needs to Know About Ontario’s Disclosure Requirements
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