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Did you ever wonder what the Real Estate Council of Ontario (RECO) has to say about Seller Property Information Statements?
Here is the official comment:
"The Code of Ethics, a regulation under the Real Estate and Business Brokers Act, 2002, contains specific provisions related to the Seller Property Information Statement (SPIS).
However, it does not oblige a seller to complete one. The SPIS will provide information related to defects, renovations and other pertinent property information, based on the seller's knowledge and experience.
If a broker or salesperson has a seller as client and knows that the seller has completed the SPIS, the broker or salesperson is required to disclose its existence to every buyer interested in the property. They are also required to make the SPIS available to any interested buyer upon request, unless the seller has directed them not to.
Brokers and salespersons are also required to disclose material facts. This means they have an obligation to disclose any fact they are aware of that, with respect to the real estate transaction, that might reasonably affect a person's decision to buy or sell a property."
You will notice several points:
1) RECO is neutral on the completion of the Form,
2) RECO does not refer to any particular Form,
3) RECO does not deal with any disclosure obligations on the part of the seller,
4) RECO indicates that if a registrant has a listing, and the seller has completed a SPIS, then the existence of the Form must be disclosed to every interested buyer,
5) Copies of the SPIS Form must be made available, unless directed by the seller to the contrary,
6) The obligation does not arise if the prospective seller is a customer (rather than a client),
7) RECO reminds registrants that they have a duty to disclose material facts.
RECO deals specifically with the duties and obligations of a registrant. It does not deal with the question as to the advisability of the seller completing the document in the first place.
The SPIS Form is controversial. It is both complicated and complex. It is both detailed and vague, in parts. Many real estate boards prefer the use of the SPIS Form because it is their belief that the liability imposed upon sales representatives and brokers is lessened if the document is signed.
Many lawyers, particularly those who practise litigation believe that the document substantially increases the liability of the seller, beyond that imposed by the common law. Consequently, they counsel against the execution of the SPIS form.
In all the controversy, many registrants overlook the fact that they are providing advice and guidance to their sellers in respect to the completion of the SPIS Form. This role increases their liability. Once the lawyers catch on, any seller will likely add his or her own sales representative to the lawsuit, claiming "improper advice" was given concerning the document.
So, be cautious! If you decide to sign one as a seller, first consult your lawyer.
Brian Madigan LL.B., Realtor is an author and commentator on real estate matters, Royal LePage Innovators Realty 905-796-8888 www.OntarioRealEstateSource.com
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.