In Ontario, there is a good deal of the confusion about this disclosure issue.
We have:
1) 1) interest in the property disclosure and
2) 2) the family disclosure.
There are two separate and distinct disclosure requirements, one under the Act and the other, under the Code. Section 32 of the Act requires disclosure of a direct or indirect interest. This notice goes to the OTHER SIDE in a deal.
This is the one which appears to apply. You have to disclose whether you are going to flip the property. That’s important. It has to be a direct or indirect interest. It’s far more likely that you would have an indirect interest, if the Buyer were your spouse, but that’s not always the case.
Section 18 of the Code requires disclosure of a relationship. That notice goes to your own CLIENTS and CUSTOMERS, no one else, nobody else could care less.
The problem arises due to the fact that OREA has one single Form rather than two. It becomes confusing and for those who don’t want to look up the two sections in the Act and the Code, it’s often easier to simply say : “who cares, tell everybody, everything… I have nothing to hide…”.
So, we have all kinds of disclosures to independent Sellers by Buyer Agents indicating a relationship to their son, or daughter etc. This is not required. This agent needs to tell their own competitive buyers who may feel that there would be a preference given to the relative. The Seller couldn’t care less!
Going forward, there are risks associated with unnecessary disclosures. If there were ever a lawsuit, the person suing is looking to prove that the agent was incompetent and negligent. Why provide them with evidence of a lack of familiarity with the Act and the Code? That’s exactly what they are trying to prove!
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