Property Condition Clauses in an Ontario Agreement of Purchase

You have found a leak, a cracked foundation or an old repair nobody mentioned, and you are looking at the agreement of purchase and sale for what it says about the property's condition. Words like "as is" or a seller warranty can feel decisive, but they are only part of the picture.

This article explains the general rules in Ontario on defects, what counts as latent, and how the wording of your agreement fits in. The outcome in your case depends on the exact clauses and facts, so a lawyer should review them.

Buyer beware in Ontario

Ontario follows "buyer beware". A seller generally need not disclose patent defects, which a buyer can find through reasonable inspection and inquiry. These duties come from case law, not TRESA.

In plain terms, the law expects you to look carefully and ask questions. That is why buyers commonly look at inspection conditions before the deal is firm. Whether your agreement gives you time to inspect, and how long, depends on its exact wording, so read the conditions closely and confirm with a lawyer before you waive anything.

Patent and latent defects

The difference between the two types of defect drives most disputes.

Wilful blindness can also create liability. A seller cannot avoid the issue by deliberately not looking at a problem they suspect.

Telling the two types apart is not always easy. A crack you can see from the basement may be one thing, while water damage hidden behind a finished wall may be another. Which category your problem falls into depends on the facts, so it is worth confirming with a lawyer.

What "as is" and warranties do

Agreements often include wording about the property's condition, such as an "as is" statement, or a seller warranty about things like chattels or known problems. What these clauses mean, and how far they limit your rights, depends on the exact words in your agreement and the facts. Read them closely and have a lawyer explain them before you sign.

• Look for any clause describing the condition of the house, systems or chattels.
• Check whether a warranty survives closing or ends when you take possession.
• Note any inspection or other conditions and their deadlines.
• Ask what the wording means if the seller knew of a problem and did not mention it.

Be careful about assuming that wording alone protects a seller from a hidden, dangerous defect or a deliberate misstatement. The case law duties in the previous section still matter, and concealment and misrepresentation can change the result.

The seller information statement

A seller property information statement is not a required form. A seller's agent may ask the seller to complete one, and it is based on the seller's own knowledge and experience.

If a seller has prepared an information statement for buyers, the seller's agent must tell every interested buyer that it exists, and must give a copy to any buyer who asks. If you received one, keep it. Compare what it says with your inspection findings, because a statement that does not match what you find may matter later.

What to do next

• Keep the agreement, any information statement, listing details and all messages with the seller's side.
• Photograph the defect and get a written report from a qualified inspector or contractor.
• Do not make repairs that destroy the evidence until you have advice, unless safety requires it.
• Note when you found the problem and whether the seller could have known of it.
• Check whether any condition is still open and when its deadline falls.
• Speak with a real estate lawyer before you waive a condition, close, or send a demand.

None of these steps decides who is responsible. They keep your options open and give a lawyer what is needed to look at your situation properly.

Frequently asked questions