Everything You Need to Know About Disclosures and Divorce

For Home Sellers

As a home seller, there are several things you are legally or morally obligated to disclose to the buyer before you can finalize the sale. Some disclosures are mandated only if the buyer asks explicitly. Others you have to divulge upfront before you even begin accepting offers.

Selling your home during a divorce is a lot more complicated than a traditional home sale. Click here to learn more.

What are Disclosures and Why Do They Matter?

Buying a house is the most significant investment most people will ever make in their lifetime. As such, there are laws in place to protect potential homeowners from landing a property that is unsafe or unsuitable. These laws require you to inform the buyer of any latent material defects, even if it may cause them to decide not to purchase the property. A latent defect is anything that a buyer can’t see upon viewing the home and that even a casual home inspector might miss. A broken window or floorboard doesn’t qualify because those are easily visible.

Mandatory disclosures about latent defects include:

Anything that would make the house unsafe to live in:

  • Electrical and wiring problems
  • Structural damage
  • Chronic Mould
  • Unsafe drinking water
  • Serious vermin or pest infestations

Major flaws that make the house uninhabitable:

  • A flooded basement
  • Leaky roof
  • Damaged caused by illegal activity (a grow op)

Anything that makes the house unfit for their needs: 

For example, your buyer wants to build a garden suite, but current zoning laws do not allow it. If a buyer tells you about a specific purpose, you must let them know that the house may be unsuitable. However, you don’t have to be a mind reader. You only need to disclose this information if they make you aware of their intentions.

Failure to disclose a latent material defect can have serious consequences. It could result in your transaction falling through and having to start the selling process all over again. Even worse, you may find yourself at the wrong end of a lawsuit. Ontario law gives a buyer up to two years to sue if they discover an undisclosed latent defect in the home. In the worst-case scenario, you could even be subject to criminal liability.

Understanding the rules and regulations about real estate won’t just protect you from lawsuits. It can help you capitalize more on your investments. Here are some other topics you should be aware of:

What about Divorce?

In short, you must inform the buyer of any material characteristics about the property that might hinder them from proceeding with the purchase. However, there is no need to go overboard and provide information the buyer doesn’t have any right to. Your divorce has nothing to do with the quality or suitability of the house. 

People may be curious about your reason for selling, but you are under no obligation to tell them. 

Instead of giving them details you’d rather keep private, try to refocus their attention on the many features that make your house valuable. Remember that the market is strongly in your favour as a seller right now. The demand for homes in Toronto has never been higher, and listings are in short supply.

There is no need to withhold information about a stigma or to disclose your private details, especially in this market. If one buyer walks away because of a rumour your house is haunted, another will take their place that is thrilled by the idea.

However, there are some other types of disclosures that you might need to consider.

Disclosures Due to Stigma

A stigma is a negative belief or quality about the home that may deter some buyers but doesn’t affect the material quality, safety or suitability. 

Examples of stigma include:

  • A death or suicide that took place in the home
  • A serious crime was committed with no damage to the property
  • The house is haunted or cursed

Are you legally required to tell a buyer about a stigma? Only if they ask, and you can choose not to answer even then. However, if you decide to answer, you must be honest.

Want more advice to help make your house appealing to buyers? Here are some tips to point you in the right direction:

Disclose Cameras or Recordings

In this day and age, security cameras and smart technology are prevalent in many homes. Some sellers have used this to record conversations between potential buyers in an attempt to find out what they liked and how much they were willing to offer. If you record someone without their knowledge or consent, you can be held criminally responsible and even serve jail time. While it is legal under Canadian law to record someone, you must disclose the fact and have permission before the buyer enters your home. 

Focus on Building Value

Before listing your house, work with an agent to make your property show well. Thorough cleaning and decluttering make your home instantly more pleasing and inviting. A few minor upgrades can add thousands of dollars in value to your sale. And don’t forget to call attention to all of the amenities nearby that make your neighbourhood a fantastic place to live.

Have questions about selling or buying a home in Toronto? I can help! Call or text me at 647-239-7587 or send me an email at melissa@southetobicoke.com to get started.

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