- How a disclosure form applies to your sale depends on the form and your documents, so answer from your own knowledge, be accurate and confirm the details with a lawyer.
- Condominium resales have their own required disclosure package, including Forms 2A, 2B or 2C and Form 3.
- If you are unsure how to answer a question, say so and get advice before the form goes to a buyer.
You are about to list your home, and someone has handed you a Seller Property Disclosure Statement. It asks about the roof, the basement, the wiring and more, and you may wonder how much detail is expected and what happens if you get something wrong.
This article explains in plain terms what the form is for and how to approach it. How disclosure obligations apply to your sale depends on the facts and your contract, so a lawyer can confirm the details before you sign anything.
This article covers the law of Manitoba.
What the statement is
Sellers are often asked to describe their property in writing so that a buyer understands what the seller knows. What a particular form covers, and how it fits with your listing and offer, depends on the form itself and the documents you sign, so it is worth having a lawyer confirm this before you hand it over.
Whatever form you are given, a sensible approach is to be careful and honest about what you actually know, have seen, been told or dealt with. What the form requires of you, and how it affects your sale, depends on its wording and your contract, so it is worth confirming with a lawyer.
What sellers commonly include
The exact wording depends on the form you are given. As a practical way to prepare, think through areas of the home like these:
- Structure: foundation cracks, past or present leaks, flooding or water in the basement.
- Systems: age and condition of the roof, furnace, plumbing, electrical and septic or well where relevant.
- Renovations and repairs: what was done, when, and whether permits were obtained.
- Pests, mould, fire or other damage you know of.
- Environmental matters, such as fuel tanks or past contamination.
- Anything else you know that could affect the buyer's decision.
If you did not live in the home for part of its history, say so and answer only from what you actually know.
Condominium sellers have a separate package
If you are selling a condominium unit, a specific set of documents is required. On a resale, the seller must give the buyer a current seller disclosure statement (Form 2A, 2B or 2C), a corporation disclosure statement signed within 90 days (Form 3), the declaration with amendments, budgets, the latest financial statements, by-laws and rules, and any reserve fund study or summary, plus Forms 4, 5 and 6B.
The buyer then has a seven-day cooling-off period that starts on the later of signing and delivery of the disclosure documents, and the buyer can cancel for any reason. This means the timing of your delivery matters. If you sell a unit before the declaration and plan are registered, a different package applies.
If the buyer cancels during the cooling-off period or because of a material change, the seller must refund the amounts paid plus interest within 10 days after receiving the cancellation notice.
Answering carefully, and what if an answer is wrong
Whether a wrong or incomplete answer leads to a claim depends on what was said, what you knew, what the contract says and how the buyer relied on it. The result cannot be predicted in general, and a lawyer can explain how it applies to your sale.
In practice, the safest approach is simple. Do not guess, do not leave out something you know about and do not minimize a problem. If you do not know, write that you do not know. If you have repair records, reports or receipts, attach or keep them.
If you realize an answer was wrong after the form has been given to a buyer, tell your lawyer or agent promptly rather than waiting for closing.
What to do next
- Gather repair invoices, permits, inspection reports and warranty papers.
- Walk through the home, basement to roof, and note anything you know about.
- Answer each question from your own knowledge, and write 'unknown' where that is true.
- Keep a copy of the signed statement and the date you gave it out.
- If you are selling a condominium, collect the disclosure package documents early.
- Ask a lawyer to review the form and your listing documents before you sign.
Frequently asked questions
Do I have to fill out a disclosure statement?
Whether a particular form is required for your sale depends on your listing agreement and the type of property, so confirm this with your agent or a lawyer. For a condominium resale, a specific package of disclosure documents is required.
What if I do not know the answer?
Say that you do not know. Do not guess. The form is meant to reflect your knowledge, and an honest 'unknown' is better than an inaccurate answer.
Can the buyer cancel a condominium purchase?
Yes, in the cooling-off period the buyer can cancel for any reason, and the period is seven days from the later of signing and delivery of the disclosure documents. A buyer may also cancel for a material change by midnight of the seventh day after the seller's written notice, but not after taking possession; a seller who disputes a cancellation made after the cooling-off period may apply to court within 10 days of receiving the notice.
What if I find out later that an answer was wrong?
Tell your lawyer or agent right away. The consequences depend on the facts and your contract, so get advice before you respond to the buyer.
Sources
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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