Whether you are buying or selling a home for the first time, you have a lot you must prepare. As a seller, you may need to make repairs and clean out a house. As a buyer, you will likely be getting your finances together, touring potential homes and packing up your existing home.
With so much preparation that goes into this process, it can be especially upsetting to feel you have been duped in a transaction. Such could be the case if a buyer fails to disclose pertinent details about a home before selling it.
Mandatory disclosures in Ontario
Disclosing information about a home means alerting potential buyers about any issues with the property. Generally, these details will fall into one of two categories: patent defects and latent defects.
As this article discusses, patent defects are easily observable and typically do not require inclusion in a disclosure document. These issues can include:
- Large cracks in the foundation
- Missing bathroom or kitchen fixtures
- Stained walls or ceilings from leaky plumbing
- Windows and doors that do not close properly
These are all things that should be discovered during a routine inspection of a home.
On the other hand, latent defects are not visible and may not be identified unless the homeowner discloses them before a sale. Some examples of a latent defect include:
- A basement that floods whenever it rains
- Plumbing issues behind walls
- Faulty electrical wiring
- There is a presence of lead, asbestos, carbon monoxide or other toxic materials
Sellers would need to disclose issues like these.
However, it is crucial to keep in mind that disclosure requirements can vary based on the significance of the issue and the owner’s knowledge of the problem.
Disclosure mistakes to avoid
If you are selling a home, failing to disclose defects can have costly consequences and potentially jeopardize a sale.
If you are a buyer, waiving an inspection can mean you wind up paying for expensive repairs in the future. Note that having an inspection may not reveal all the issues with a home, including latent defects. However, if you discover a latent defect after buying the house, the seller could be responsible for paying those repairs if they failed to disclose them.
Thus, these are critical mistakes parties should avoid when they are buying or selling their first home.