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Failure to disclose often the source of real estate lawsuits

One of the most common reasons for legal trouble in a real estate deal is disclosure. Disclosure-related lawsuits tend to emerge when a purchaser discovers something negative about a home after moving in which should have been revealed under Ontario real estate law. The defendants in these suits may be inspectors, real estate agents or the former owner(s) of a property.

There are many issues that someone could complain about if they are not disclosed. This can include a leaking roof, pest issues, plumbing problems, zoning ordinance violations, building code violations or deaths that occurred on the property. In order to avoid a legal issue related to disclosure problems, it is wise for a seller to be forthcoming with any prospective buyers.

A seller is advised that it is not in his or her best interests to complete the Seller Property Information Statement ("SPIS").  These forms are difficult to complete properly.  Most people will be unable to accurately complete the form without the assistance of a team of lawyers, surveyors, agents and inspectors.  If the SPIS is not completed properly then the seller will be exposed to potential liability for misrepresentation.   The SPIS asks some ambiguous questions that may elicit subjective, rather than objective responses.  The SPIS can therefore be honestly completed, but still be inaccurate.

A court could award money for damages, including repairs and possibly lost profits. In some cases, punitive damages and/or compensation for pain and suffering will be ordered.

A real estate agent may also be legally responsible if they conceal information about the condition about the property.  Sellers who are facing a lawsuit for real estate issues in Ontario and buyers who wish  to bring legal action should speak to a lawyer to understand the best action and resolution in their case.

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Merovitz Potechin LLP
300-1565 Carling Avenue
Ottawa, ON K1Z 8R1

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