Does a Seller Have to Disclose Defects When Selling a Home in Ontario?

Buying or selling a home raises an awkward question: what does the seller have to tell you? Buyers worry about hidden problems like water damage or unsafe wiring. Sellers worry about being blamed for something they never noticed or did not think mattered.

In Ontario the answer depends on the type of defect and on how the seller behaves. This article explains the basic rule, the difference between visible and hidden defects, when a seller can lose legal protection, and what the optional property information statement does.

The starting point: buyer beware

Ontario follows a rule often called buyer beware. In plain words, the buyer is expected to look into the condition of the property before buying, and a seller generally does not have to volunteer every flaw in the home.

The seller's duties to disclose come from case law, not from TRESA. That matters because there is no simple statutory checklist of what must be disclosed. Courts look at the facts of each situation.

Patent defects and latent defects

The law treats two kinds of defects differently. A patent defect is one a buyer can find through reasonable inspection and inquiry. A latent defect is hidden and is not easily found that way.

Not every hidden problem triggers the duty. The duty described in the rules applies to latent defects serious enough to make the home unfit to live in, or dangerous or potentially dangerous. Whether a particular problem meets that standard is a question of fact, and a lawyer can help you assess it.

When a seller can lose buyer-beware protection

Buyer beware is not a licence to mislead. A seller who conceals a patent defect can lose the protection of the rule. Painting over a stain or hiding a crack behind furniture to keep a buyer from noticing it are the kinds of actions that can cause trouble.

• Concealment: hiding a defect that would otherwise have been visible can remove buyer-beware protection.
• Misrepresentation: failing to disclose a latent defect may be treated as misrepresenting the property.
• Wilful blindness: deliberately avoiding finding out about a problem can also create liability.

The practical lesson for sellers is that deliberately not looking, or not mentioning something serious, is not a safe approach.

The seller property 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 the seller has prepared a statement for buyers, the seller's agent must tell every interested buyer that it exists. The agent must also give a copy to any buyer who asks.

Because the statement reflects what the seller knows, answers should be honest and careful. A buyer who receives one should read it closely, but should not treat it as a replacement for an inspection.

What to do next

For buyers:

• Arrange a professional home inspection before your offer becomes firm, and read the report carefully.
• Ask direct questions about past leaks, repairs, pests, and renovations, and keep the answers in writing.
• Ask whether the seller has prepared a property information statement, and request a copy.
• Follow up on anything the inspector flags rather than assuming it is minor.
• Speak to a real estate lawyer before you sign if something seems unclear or concerning.

For sellers:

• Answer questions honestly and completely, including on any information statement.
• Do not cover up visible problems or hide signs of a hidden one.
• If you know of a hidden problem that affects safety or whether the home can be lived in, speak up.
• Do not avoid finding out about a suspected problem just to avoid having to mention it.
• Ask a lawyer if you are unsure whether something must be disclosed.

Frequently asked questions