03.25.2023 | Selling A Home

What You Must Disclose When Selling Your Toronto Home

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A lot of thought goes into selling your home when you live in Toronto. First, the decision to sell at all is often the most difficult aspect. Your house has become your sanctuary, and it can be hard to say “goodbye.” 

Once the wheels are in motion, you have other considerations, such as researching the current real estate market and deciding how to prepare your home for maximum impact. Why does any of this matter? 

If you’re like most homeowners, earning the highest possible return is your primary focus when selling your house. You clean, declutter, paint, and stage to make your home look breathtaking and desirable to potential buyers. A successful sale isn’t always just about surface appearances, however. If you want to stay on the right side of the law and even avoid getting sued, there are some disclosures you may have to make to your buyer.

What Is a Disclosure?

A disclosure document notifies the buyer about any material defects in the property that might impact their purchasing decision. Obviously, making a disclosure protects the buyer from ending up with a home that is entirely unsuitable for their intended purpose. 

The downside is that revealing a latent flaw in the home could cost you the sale. But disclosures also protect you, the seller. It really doesn’t pay to try to get something past a potential buyer. If you don’t get caught beforehand, you could be open to a lawsuit after the sale. The consequence could range from being forced to pay for the repairs or even losing the contract altogether!


There’s much to consider before putting your home on the market. Here are some other resources to guide you:


Types of Defects

If the buyer or a home inspector can observe a flaw, it’s considered a patent defect. For example, broken windows or floorboards are easily noticeable. You don’t have to officially disclose a patent defect to a buyer because you’re covered under the “caveat emptor” principle. In plain English, this means “buyer beware.”

While not obligated to disclose a patent defect, it is illegal to try to conceal them. So it isn’t advisable to hide a broken floorboard under an area rug and hope the buyer doesn’t notice. Otherwise, you could be held liable for fraud.

A latent defect is a flaw in the home that is not easily detectable through a regular inspection. Examples include: 

  • Electrical problems 
  • Damaged plumbing pipes
  • A leaking foundation
  • Roof problems
  • Mould behind the walls

The issue with latent defects is that they are hidden. As the seller, you may not even be aware of them, especially if they don’t turn up during a home inspection. What’s more, a buyer has up to two years after the defect is discovered to file a claim against you.

The good news is that you can’t be held liable for defects if you can prove you had no knowledge of them. The trouble arises if you are dishonest or deliberately try to conceal a known flaw to try to get top dollar for the home. 

What to Disclose Without Question

When are you absolutely obligated to disclose an issue with your home? By law, you must reveal defects if they meet any of the following conditions:

  • The flaw makes the home uninhabitable
  • The house is unsuitable for the buyer’s stated purpose
  • The home is unsafe as a result of the defect

In Ontario, a SPIS (Seller’s Property Information Statement) is a document that reveals all known defects, renovations, and other property information. Though not legally required, you must inform the buyer if there is a SPIS on the home. In addition, many buyers will request them as a condition of the sale. 

In one way, having a SPIS can protect you from future litigation, presuming you have filled it out honestly and to the best of your ability. However, anything that changes between the day you provide the document and the buyer taking possession of the home can come back to haunt you. How?

Imagine that your SPIS came back clean, with no water issues to report. You and the buyer are happy to know that your home has a clean bill of health. But after your report, you get a flood in the basement. You must now disclose that flood to the buyer, which may affect their decision to purchase the home. 

Maybe they’ll agree to fix the issue themselves in exchange for a lower price. Or they may require you to repair the damages before the sale can proceed. Neither scenario is ideal, but both are better than getting sued!

What Are the Grey Areas?

Is there a ghost wandering your halls at night? Or any ancient curses placed on your home that you are aware of? Even more importantly, do you have to report these frightening happenings to your potential buyer?

Hauntings or curses are known as stigmas, and your obligation to disclose them becomes a little more murky than with latent defects. Suspected paranormal activity isn’t the only stigma to be aware of. 

Tragedies such as a suicide or a murder in the home can also impact a buyer’s decision, even though they have nothing to do with the quality of the property itself. What are your legal obligations in these situations? Your real estate agent must report on known stigmas in the home. As the homeowner, you only have to disclose them if the buyer specifically asks. But if they ask, you must provide an honest answer.

What about troublesome neighbours? The same rules apply. If your Realtor® has knowledge of a noisy or disruptive neighbour, they are obligated to disclose the fact. As the seller, you have the option to keep quiet. But if the buyer asks, you must answer honestly, without half-truths or evasive, misleading statements.


Looking for something to do when you have some free time in Toronto? Here are some ideas:


Yes, You Still Have the Right to Privacy

With all of these mandatory disclosures, you may start to feel like you’ve lost all rights to privacy. However, you can rest assured that there are some issues you don’t have to disclose to a buyer under any circumstances.

For example, are you selling the house because you’re getting divorced or remarried? A buyer may try to flush that information out because it may indicate how motivated you are to sell. But your personal circumstances have nothing to do with the quality of the house and don’t affect the buyer in any way. Likewise, you don’t have to disclose a personal illness or other sensitive family information to the buyer. These are secrets you can keep to yourself with no repercussions.

Knowing what to disclose and when can be a touchy subject. However, you can rest assured that thousands of real estate transactions take place every day without issue.

The adage “honesty is the best policy” will keep you on the right side of the law in nearly every circumstance. At the Erica Reddy Real Estate Team, we have seen it all and can help you navigate even the most complicated transactions. If you have questions or want more information, reach out to us at erica@ericareddy.com or call 416.443.0300, and we are happy to provide the guidance you need.

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