What do you have to disclose when selling your home?

home seller disclosures

Legally, what are you required to disclose to buyers when you put your home on the market? Just major problems or current issues, or do you have to disclose past repairs as well? We posed this question to real estate lawyers in Canada and the U.S., and this is what they said:

Disclose all known issues

Andrew Cao, a real estate lawyer with Edmonton law firm KBL Law LLP, says that it’s in your best interest to disclose all known issues, even if they have been repaired.

“I’ve found that many buyers, if they like the home enough, will simply accept the issues that exist. Even if a seller does have to lower the price or repair the defect (I recommend the former versus the latter), this cost will likely be far less expensive, stressful, and faster than going through years of potential litigation,” he says.

Real estate attorney Heather Anderson of Miller Anderson Lay Group LLC also recommends full disclosure.

“It’s critical, especially for sellers who have lived many years in a property, to recall the details about leaks and other problems they encountered while living in the home,” she advises. “If it’s disclosed and the buyer proceeds, then she did so with full disclosure. If it is withheld and there is a later issue, then the buyer will claim fraud, misrepresentation and/or concealment.”

State and regional laws

“In Tennessee, most sellers are required to complete a specific disclosure form which asks a wide variety of questions about the home for sale, from past water intrusions to the condition of the roof to whether there is a homeowner’s association/dues,” explains Anderson.

In America, real estate disclosures differ by state, although the Residential Lead-Based Paint Hazard Reduction Act of 1992 is applicable to all residents. Under the Act, sellers have to disclose the presence of lead-based paint or lead-based paint hazards in homes built before 1978.

In Canada, Property Disclosure Statements (PDS) and Seller Property Information Statements (SPIS) are commonly used and often included in standard real estate contracts, but they are not required by law.

“In Alberta, the common law generally features the concept of caveat emptor or ‘buyer beware.’ Unfortunately for sellers, there are ways around this for a buyer that a seller/selling realtor must be cognizant of when listing a property or accepting an offer,” says Cao.

Be sure to check with your real estate agent and/or lawyer to ensure that you are in compliance with the law.

You can be held liable for failure to disclose

“One of my clients allowed her new husband to complete the disclosure form, and he was unaware of a prior incident of water intrusion, thus it was not disclosed. Shortly after the sale of the home, the husband died and my client was faced with a lawsuit for failure to disclose. If your agent is experienced, he can give you advice on what should be disclosed or not,” says Anderson.

Anderson notes that the common mistakes that result in legal action include dismissing defects as insignificant or not disclosing prior issues because they have since been repaired.

“Let the buyer decide whether she wants to have her own expert confirm the repairs were correct and there are no outstanding or lingering issues with the repair,” she adds.

Cao suggests going through your property from “top to bottom, inside, and out, and identifying all issues with the property no matter how big or small to determine if these issues should be disclosed.”


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