What Real Estate Agents Have To Reveal

From The Times - Friday, October 10, 2003

Quote: "It's kind of a moral thing and most realtors are really conscious of that." - Reg Davies, President - Fraser Valley Real Estate Board

According to the Canadian Real Estate Association, the national board governing real estate agents, there are four legal principles regarding disclosure when selling a property, said Reg Davies, president of the Fraser Valley Real Estate Board in Surrey. They are:

1. Generally, the seller is not required by law to disclose known patent defects, things that the buyer can see for himself.

2. Generally, the seller is required by law to disclose material latent defects; mould, sewer damage, oil slicks on the property, etc., things that would not be seen by the buyer or a home inspector.

3. Generally the seller is not required to disclose that a property was used for criminal activity.

4. The disclosure obligation of an agent does not exceed those of his client, the seller.

According the CREA there are legal consequences of selling a pot house without disclosure that it was once used as a growing house. Even though there is no obligation to disclose that the property was a growing house, that is the first area of inquiry a real estate agent must undertake.

There is always an obligation to disclose material latent defects that are known or should be known by the seller. Both the seller and the listing realtor, if they knew or ought to have known, could be liable for damages to the buyer for the costs of any necessary repairs to make the property fit for habitation. It must also be remembered that the standard of care imposed on real estate practitioners require them to confirm information the circumstances dictate.

In some situations, real estate agents may not be able to simply take the seller's word for the status of defects, and may be required to investigate further.