So, you’re looking to buy your next home. Exciting times! After touring numerous homes, one catches your eye and you’re very serious about it. So serious that you want to put in an offer. But later that night, a friend tells you of a violent crime that took place at the property a few years back! Hmmm, now what? Is that true? Should you worry? These little questions lead to a much bigger question…
Does a realtor have a responsibility to tell me everything about a house?
If a realtor has knowledge of an event or stigma associated with the house, such as a death or illegal substances grown in the home, for example, they must disclose the information. All real estate sales agents/realtors are governed under the Real Estate Council of Ontario (RECO) and are regulated by the Ontario Real Estate Association (OREA). With that governance, all realtors in Ontario have an ethical obligation to disclose the existence of stigmas concerning the home such as a murder, suicide, drug lab, brothel, death by natural causes or even paranormal activity. They are obligated to tell you the buyer before you put in your offer. However, in many instances, a realtor may not know the home’s history.
Is the seller required by law to share information?
Simply put, if a seller and their agent are asked a question about the property, they cannot give a false answer…it’s unethical. In fact, when listing their home, sellers complete a Seller Property Information Statement (SPIS) which details defects and concerns about the home, including any renovations, big repairs, and so on. They are trusted to complete this ‘to the best of their knowledge’. However, as of yet, there is no formal law in Ontario that states a seller must disclose information like a violent crime that has occurred on their property. Without an actual law in place, the responsibility rests on the buyer and realtor to ask as many questions as possible. The saying, ‘buyer beware’ really rings true and you’ll want to do as much research as you can on the property so you have peace of mind as the new owner.
What about grow-ops?
The police maintain a list of marijuana grow operations they have discovered in Ontario, but of course not all operations get discovered and documented. It is completely up to the seller to disclose if they knew their property was a grow op previously and report any existing defects that might have resulted from this past use. If it is shared with you that such activity has occurred on the property, you may ask for proof that the defect was fixed or will be fixed from the local health or building authorities. Again, if the buyer asks the question, the seller is obligated to answer truthfully.
Can the seller record my comments when I’m at an open house?
In more recent years, sellers have been known to set up hidden cameras and recording devices in various parts of their home. They want to hear what potential buyers are saying to be able to use that information to their benefit, by leveraging it when it comes to negotiations. The dark side to this is that if people touring the home talk about personal financial details, like how much they are willing to offer, that can allow sellers to use that to their advantage.
Canadian laws are fairly clear when it comes to privacy boundaries, but it has created a bit of a grey area in the real estate business. The legislation states that a person cannot intentionally record or listen to a private conversation using a range of devices. If a seller does use the conversations to their advantage and they are found out, the law says it can result in jail time.
On the flip side, if a seller has disclosed they are recording the home visit or open house, it is completely legal. This is something that all potential buyers should be made aware of and be very cautious about in their conversations while touring homes. As a buyer, it’s best to save your impressions about the home for the privacy of your own vehicle or away from the property.
These are just a few factors to consider regarding disclosure issues when working with your realtor. Buying a home is a complicated process; there’s a lot to know and understand. For that reason, it’s advisable to work with an experienced real estate lawyer to make sure everything is valid, thoroughly researched and above board. At Ares Law, we specialize in helping clients in Bracebridge, Huntsville, Gravenhurst and the greater Muskoka region to ensure their property purchase runs smoothly and all legal bases are covered. Connect with us today at (705) 645–8743 and see how we can help.
