Seller disclosure in Ontario: what a home seller has to tell a buyer

The short answer

Seller disclosure in Ontario does not come from a single form or statute. The Real Estate Council of Ontario (RECO), which regulates agents and brokerages, says a seller’s obligation to disclose “is based on current case law, not TRESA,” the Trust in Real Estate Services Act.

In practice that means three things. A seller must disclose latent defects, the hidden problems that make a home unfit to live in or dangerous. A seller does not have to point out defects a buyer could see, but should not try to hide them. The seller’s agent has separate duties under the regulations, including passing on facts the seller is legally required to disclose.

This post sets out what RECO and the Ontario regulations say. It is general information, not legal advice. The law of latent defects is, in RECO’s words, “complicated,” so a real estate lawyer should review anything you are unsure about before you list.

Latent and patent defects: the core of seller disclosure in Ontario

RECO’s Bulletin 7.4 draws the line between two kinds of defect.

	Patent defect	Latent defect
What RECO says it is	One a buyer or home inspector can detect by reasonable observation and inquiry	One that would make the property unfit for habitation, dangerous or potentially dangerous. It is generally not apparent to someone inspecting with reasonable care
Must the seller disclose it?	No. RECO calls it a case of buyer beware	Yes
The catch	Buyer beware may not apply if the seller tries to conceal it	A seller may be liable even without direct knowledge if they were wilfully blind

The last row matters most. RECO says a seller “who attempts to hide or cover up a defect faces additional liability.” Painting over a water stain on a basement wall before listing is the kind of step that turns a visible issue into a concealed one.

Is there a seller disclosure form in Ontario?

There is an optional one. RECO says your agent may ask you to complete an information statement about the property covering defects, renovations and other information based on your knowledge. It is sometimes called a Seller Property Information Statement (SPIS).

RECO describes two ways it is used:

• For your agent only. The statement helps your agent understand the property. It should be clear the information is not to be shared with buyers.
• For buyers. Some sellers make the statement available to interested buyers. RECO suggests talking to your agent about the pros and cons first.

If you prepare one for buyers, the rule changes. Section 22.3 of Ontario Regulation 567/05 says the seller’s agent must disclose that the statement exists to every buyer who expresses an interest and, if asked, provide it as soon as possible.

RECO also reminds buyers that a seller may not be aware of defects and that the information in an SPIS is based only on the seller’s personal knowledge. Anything you write in it should be accurate and limited to what you actually know.

What your agent has to disclose

The regulations put duties on the agent that sit alongside the seller’s own obligations.

1. Facts the seller must disclose. Under section 22.2 of O. Reg. 567/05, if a seller has a legal obligation to disclose a fact and the seller’s agent knows it, the agent must disclose it to every buyer who expresses an interest. An agent cannot keep quiet about a known latent defect because the seller asks.
2. Material facts to their own client. Section 22.1 requires an agent to take reasonable steps to determine the material facts and disclose them to their client. A material fact is one that “would affect a reasonable person’s decision to acquire or dispose of the interest.”
3. No misrepresentation. RECO’s Code of Ethics requires agents to make best efforts to ensure representations are accurate and not misleading. TRESA prohibits false, misleading or deceptive statements in advertising.

RECO’s Bulletin 7.3 lists examples of facts often considered material. They include knob and tube wiring, lead or galvanized plumbing, a history of flooding, structural damage or a previous fire, renovations and whether permits were obtained, special assessments, zoning and past use as a marijuana grow operation. RECO adds that an agent’s reasonable steps are “not met by simply accepting the seller’s verbal representations.”

Stigmas: deaths, crimes and past uses

Some issues are not physical at all. RECO’s Bulletin 7.5 defines a stigma as a non-physical, intangible attribute of a property that may cause a psychological or emotional response in a buyer. Its examples include a death at the property, use in the ongoing commission of a crime, a notorious former owner, reports that the house is haunted and a remediated former grow operation.

RECO says stigmas are “not explicitly addressed in the legislation.” For seller clients, it says the agent should advise the seller to get legal advice about their rights and obligations and get written instructions on whether to disclose the stigma to buyers. It also recognizes that a seller may know nothing about events before they owned the home or while it was rented out.

This comes up often for estate trustees and adult children selling a parent’s house, who may not know the full history. Our post on selling a parent’s house in Markham covers that situation in more detail.

What buyers do on their side

Disclosure does not replace a buyer’s own checks. Ontario’s buying guidance says that even if a seller has had a pre-listing inspection done, buyers should have their own inspection. It also says an inspector cannot see or find everything. It puts home inspection fees in the range of $350 to $600. Our post on what a home inspection covers and misses explains the limits.

For a condo, the Condominium Act requires the corporation, not the seller, to provide a status certificate within 10 days of a request and payment of the fee. Our post on status certificates for Markham condos explains what that document shows.

A clear, documented listing helps both sides. RECO’s seller’s checklist says listing details such as square footage, renovations, property taxes and lot dimensions should be accurate and supported by invoices, receipts or documentation.

If a problem surfaces after closing

A dispute over an undisclosed defect is usually a civil matter between buyer and seller. RECO regulates agents and brokerages, not the people buying and selling. It says it cannot handle disputes between buyers and sellers or complaints about their conduct. It also says it has no authority to order money refunded, cancel a contract or award damages.

RECO can act on the conduct of an agent. A buyer who believes the seller’s agent knew about a latent defect and did not disclose it can complain to RECO. RECO says its discipline committee can fine agents up to $50,000 and brokerages up to $100,000. Any claim against the seller for the cost of the defect is a question for a lawyer.

The simplest protection for a seller is a written record. Keep the invoices, permits and inspection reports you relied on. Keep a copy of anything you gave buyers, including an SPIS.

Questions to settle before you list

1. Are there any problems you know about that a buyer could not see, such as past flooding, a cracked foundation or old wiring behind finished walls?
2. Have you repaired anything? If so, do you have the invoices and permits?
3. Will you complete an SPIS? If so, is it for your agent only or for buyers?
4. Is there anything about the home’s history, such as a death or a past use, that you need legal advice on?
5. Do the listing details match your documents?

Bring those answers to your lawyer and your agent before the listing goes live. Our seller services page explains how we prepare a listing. A home valuation gives you a starting figure that reflects the home’s real condition. For the full sequence, see selling a house in Markham step by step. If you are unsure what to disclose about a Markham home, contact us.