Property Disclosure Statement in British Columbia: Is It Mandatory?

Your agent hands you a property disclosure statement, often called a PDS, and asks you to fill it in. You may wonder whether you have to, what happens if you would rather not, and how careful your answers need to be.

This article focuses on the duties set out in British Columbia's Real Estate Services Rules: what your agent must do about defects whatever form is used, and how to approach any written statement. Whether a specific form is required in your situation is worth confirming with your agent's brokerage or a lawyer.

This article covers the law of British Columbia.

Start with the duty, not the form

A licensee acting for a seller must promptly, and before any agreement is entered into, disclose known material latent defects to all other parties to the trade. That duty exists whether or not you complete a form.

So even if you decide to say little on paper, your agent still has a separate obligation concerning known defects. The question is less whether you fill in a form and more how known problems get disclosed in a clear, accurate way.

Whether a particular statement is mandatory depends on regulator guidance and brokerage practice, so it is best confirmed directly with your agent or a lawyer before you decide to decline.

Your agent also has duties at the start of the relationship. Before providing trading services, a licensee must disclose, in the approved form, whether they will represent you as a client. A brokerage providing trading services to a property owner must also have a written service agreement, often called a listing agreement, unless you waive it, and it must be entered into before the brokerage represents you in offering the property.

That agreement must be signed by you and an authorized signatory of the brokerage, and it must state the property address, the effective date, the expiry date, a description of the services, and the remuneration and the circumstances in which it is payable.

What if you decline to answer?

Declining to complete a form does not remove the agent's duty about material latent defects. If a seller instructs the licensee not to disclose such a defect, the licensee must refuse to provide further trading services to that client for the trade.

A material latent defect is one that cannot be discerned through a reasonable inspection. It includes dangerous conditions, defects that would involve great expense to remedy, circumstances where a local government has given notice that something must be remedied, and a lack of appropriate municipal building and other permits.

Declining may also affect how buyers and their advisers see the sale, since they will ask questions another way. Talk to your agent and, if needed, a lawyer about the consequences before you decline.

Filling out a statement safely

• Answer from what you actually know. Do not guess, and do not describe something as fine if you are unsure.
• Where you do not know, say so plainly rather than leaving an implied assurance.
• Disclose known material latent defects in writing. A defect already disclosed in writing to a party by you need not be disclosed by the licensee again.
• Cover permits honestly, because a lack of appropriate municipal building and other permits falls within the definition of a material latent defect.
• Keep a copy of what you signed and any documents you attached.

Careful, accurate answers matter because a claim can come later. If a buyer later alleges concealment, a court proceeding generally must start within 2 years after discovery of the claim, and if a defendant wilfully conceals the claim or misleads the claimant, the 15-year ultimate period is counted from the discovery date.

Other paperwork that comes up in a sale

A disclosure statement is only one document among several. A few others are worth knowing about so nothing surprises you.

• Changes to your listing agreement must be in writing and signed by you and an authorized signatory of the brokerage, and you must be given a copy of any written agreement immediately on execution.
• When presenting an offer, a licensee acting for you must give you a disclosure, in the approved form, of your payment to the listing brokerage, any payment to the buyer's brokerage, the amount the listing brokerage keeps, and other remuneration, with money amounts stated in dollars.
• If you sell a strata lot, an owner, purchaser, or person authorized by either can request an information certificate from the strata corporation, which must give it within one week and must disclose the monthly strata fees payable by the owner.
• A brokerage must not act for both the seller and the buyer in the same trade. The exception is a remote, under-served location where separate licensees are impracticable, and then prior disclosure to each party, a signed written dual agency agreement, and a copy of the disclosure sent to the superintendent are required.

How these apply to your sale depends on your situation, so it is worth confirming with your agent or a lawyer.

What to do next

• Ask your agent in writing which form is being requested, why, and what happens if you decline.
• Review the statement line by line against your repair records, invoices and permits.
• Take the completed draft to a lawyer if you have doubts about any answer, especially on permits, water damage or structural work.
• Sign only when every statement is true to your knowledge.
• Keep a dated copy for your records.

Frequently asked questions