What's the deal with the SPIS form?
I would always recommend that homebuyers review a Seller Property Information Statement (SPIS) form before their conditions are waived.
Any representations made on the SPIS need to be truthful. These days, most people get home inspections. But a home inspector may not be able to see everything. If closets are being used for storage and the basement is crammed to the rafters with boxes, the conditions of walls, ceilings and foundations of a home may be obscured (intentionally or unintentionally).
An SPIS form is invaluable for things you can't readily detect about a property. Issues like water damage , or mould, are prime examples. Would you necessarily know that the property you're considering buying is on low lying land and floods every spring?
As a buyer, an SPIS form gives you protection if you encounter problems after closing.
When people are buying privately without an agent, it's common for the vendors to not provide an SPIS to you.
There's a lot of caselaw which talks about the legal effects of an SPIS, and when (and to what extent) sellers are obligated to disclose problems.
I'm aware that in some jurisdictions sellers are reluctant to sign SPIS forms because of the liability attached to them. In my view, a lot depends on the market. If you're in a buyer's market, why wouldn't you insist upon it? On the other hand, if inventory is low, sellers may take the position that they don't need to expose themselves to potential liability.
As a buyer, it's probably best to have a clause in your Agreement that the deal is conditional upon receipt and review of an acceptable SPIS form. This makes it clear that you are relying on the contents of the form in order to proceed with the purchase.
This blog is intended as general information only and does not constitute legal advice. If you need legal advice, please talk to a lawyer.
Kerry Fox is a real estate lawyer practising in Nepean, Ontario.
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