Property Condition Disclosure Statement in Alberta Explained

Your realtor has handed you a property condition disclosure form and asked you to fill it in. It is full of questions about the roof, the basement, the plumbing and any past problems. You may be wondering whether you have to complete it, what to say when you are unsure, and what happens if you get something wrong.

This article explains how disclosure works in Alberta around a form like this, how to answer honestly, and what can follow if an answer turns out to be inaccurate. Ask your realtor or lawyer how the form is being used in your own transaction.

This article covers the law of Alberta.

A form is a tool; the duty is the law

The legal duties in Alberta's real estate rules do not depend on any particular form. A seller's licensee acting as sole agent must disclose to all buyers the material latent defects the licensee knows of. Under transaction brokerage, the brokerage must disclose to the buyer the material latent defects it knows of.

A material latent defect is a defect that cannot be discerned through a reasonable inspection, or one that makes the property dangerous or potentially dangerous to occupants, or unfit for habitation. A disclosure form is a convenient way to record what you know about those kinds of issues. Whether you must complete a given form in your sale is something to confirm with your realtor and lawyer.

How to answer truthfully

RECA says sellers cannot hide defects or mislead buyers about a property's condition. A form is where that principle becomes concrete, because your written answers are a record of what you said you knew.

• Answer from what you actually know, not what you hope is true.
• If you do not know, say you do not know, rather than guessing in your favour.
• If you had a problem and repaired it, say so and keep the receipts and any permits.
• Do not leave a question blank to avoid a topic if the honest answer would matter to a buyer.
• Keep a copy of the completed form and any documents you relied on.

Remember that permits can matter. RECA's bulletin gives lacking the appropriate building or other permits as an example of a defect that is not purely physical. If you did renovation work, check what permits exist before you answer questions about it.

Your realtor needs the full picture

If you tell your realtor about a known defect, they must disclose it. At the same time, a seller's licensee must disclose to you, in a timely manner, all relevant facts affecting the transaction that the licensee knows of. This works best when you are open with each other from the start.

Not every fact must be announced. For example, a seller has no obligation to disclose to potential buyers that the home is conditionally sold when accepting offers. That is an exception for a specific situation, and it does not make the form optional about defects you know of.

What can happen if an answer turns out wrong

If a buyer later finds a problem, much turns on what you knew and what you said. The traditional rule is caveat emptor, "let the buyer beware": without an express warranty, a contractual condition, a collateral contract, fraud, or a certain kind of fundamental mistake, the buyer takes the land with its defects after conveyance. That commentary also notes that the doctrine has been eroding and its exceptions growing.

Importantly, the doctrine does not protect a seller who commits fraud or misrepresentation, gives an express warranty, or makes a collateral contract. A knowingly false answer on a disclosure form is the sort of thing that invites a misrepresentation argument. An honest "I don't know" is a very different position.

What to do next

• Ask your realtor and lawyer whether and how the form is being used in your sale.
• Collect permits, invoices and inspection reports before you answer.
• Fill the form out yourself, honestly, and note anything you are unsure about.
• Tell your realtor about every known defect, since they must disclose it.
• Keep your completed form and supporting papers after closing.

If something on the form is difficult to answer, such as a past event whose effects are unclear, ask a lawyer before you submit it.

Frequently asked questions