What Is a Property Disclosure Statement When Selling in British Columbia?

If your realtor has handed you a property disclosure statement, often called a PDS, you are probably wondering whether you must complete it and how much detail to give. What the form asks and how a buyer may use your answers depend on your situation, so it is worth confirming with a lawyer before you complete it.

This article explains the disclosure duty that clearly applies in British Columbia, what counts as a serious hidden problem, and why accuracy matters. Whether a particular form is required in your sale is worth confirming with your realtor and the BC Financial Services Authority's disclosure guidance.

This article covers the law of British Columbia.

Is a PDS mandatory?

The question people ask is whether the form itself is compulsory. Whether you have to fill one out depends on your situation, so it is worth confirming with a lawyer before you list. What you can rely on is the separate duty on licensees: a licensee acting for a seller must promptly, and before any agreement for the acquisition or disposition is entered into, disclose known material latent defects to all other parties to the trade.

A material latent defect is a material defect that cannot be discerned through a reasonable inspection of the property. It includes a defect that makes the real estate dangerous or potentially dangerous to occupants or unfit for habitation, a defect that would involve great expense to remedy, a circumstance for which a local government has given notice that it must be remedied, and a lack of appropriate municipal building and other permits. How this definition applies to a particular problem with your property depends on your situation, so it is worth confirming with a lawyer.

What is a material latent defect?

A material latent defect is a material defect that cannot be discerned through a reasonable inspection of the property. The definition includes several kinds of problems.

• A defect that makes the real estate dangerous or potentially dangerous to occupants or unfit for habitation
• A defect that would involve great expense to remedy
• A circumstance for which a local government has given notice that it must be remedied
• A lack of appropriate municipal building and other permits

If you did renovations, such as a finished basement or a deck, think about whether permits were obtained, since a lack of permits falls within the definition.

What to include when you answer

Answer from what you actually know. Where you are unsure, say so rather than guessing, and do not leave out something you know is a problem. Useful preparation includes gathering records you already have.

• Receipts, permits and inspection reports for repairs and renovations
• Notices from the city or regional district about the property
• Past water, drainage, roof, heating or pest problems you know about
• For a condo or townhouse, a strata information certificate

On the strata point, an owner, purchaser or person authorized by either can request an information certificate from the strata corporation, which must give it within one week of the request. It must disclose the monthly strata fees payable by the owner.

Risks of answering inaccurately

If you tell your licensee not to disclose a material latent defect, the licensee must refuse to provide further trading services to you for that trade. A licensee also need not disclose a defect to a party who has already received written disclosure of that defect from you as the selling client.

Beyond your realtor's position, a buyer who discovers a concealed problem may consider a court claim. Generally a proceeding must not be started more than 2 years after the day the claim is discovered. There is also an ultimate limitation period of 15 years from the act or omission, but if the defendant wilfully conceals the claim or misleads the claimant, the act or omission is treated as occurring on the discovery date. Whether a buyer would succeed depends on the facts, so ask a lawyer if a dispute arises.

What to do next

• Ask your realtor what disclosure documents they expect for your sale and why
• Walk through the home and list every problem you know about, even small ones
• Collect permits, invoices and reports
• Disclose known serious defects in writing rather than leaving them out
• Have a lawyer review your answers if you are unsure about a defect or permit issue

Frequently asked questions