Recent cases have shown why it is important to be frank and forthcoming about your property’s problems, during a sale.
A case in the midst of litigation, highlights the sellers duty. In this case, a sex offender in the neighbourhood, was not disclosed. Is this something that could have been discovered by the due diligence of the buyer? Well, not by a house inspection-anyway. This was information that the whole neighbourhood knew. The sellers claimed that it is a case of caveat emptor – buyer beware? It is most likely that the court will find against the sellers.
It goes without saying that owners of property with foundation problems, or constant floods should disclose the fact. Agents knowledgable of these issues also have a duty to reveal any problems, or both will be held liable to the buyer see Krwarchuck v. Scherbak
Another area where disclosure will be required is if the property was used as a grow – operations (known as grow-ops) -to grow or make drugs. These properties can have significant structural damage, and can be unsafe because of the use of bypassed utilities. Further, it may cause severe health problems through mould, or other chemicals used to make the drugs. Lobbying by the Ottawa Real Estate Board mandates the police to list the addresses of properties found to be grow ops
Another potential harm from a grow up can be the culprits coming back to claim weapons or money left on the property, which happened to a recent buyer.
These three examples show the type of information that the seller should disclose if known.