What does the seller have to tell the buyer?


This blog post will discuss disclosure of material facts, essentially the question is “What does the seller have to tell the buyer?”

The business of real estate is loaded with legal terms. Today’s blog post will discuss: disclosure, material facts and latent defects.

So lets start with defining the terms

Disclosure: The act of making new or secret information known.

Material fact: A fact that would be to a reasonable person germane to the decision to be made as distinguished from an insignificant, trivial or unimportant detail. In other words, it is a fact which expression (or concealment) would reasonably result in a different decision.

Latent defect: A fault in the property that could not have been discovered by a reasonably thorough inspection before the sale.


Seller disclosure of material facts

As I discussed in a previous blog post, real estate agents are bound by a higher code of ethics than homebuilders and private home sellers. The concept of ‘buyer beware’ does not really apply to us. When we sit down with clients to list their property for sale, it is up to us to find hidden defects in the property that would deem the property dangerous or unfit for habitation. For all home sellers, when in doubt the prudent thing to do would be to disclose the material fact to the buyers and thus avoid the possibility of going to court later.

As buyers, in the Schedule A it is not unusual to insert the following clause:

The Seller warrants that, to the best of his knowledge and belief, the property does not contain any hidden defects including but not limited to: urea formaldehyde foam insulation (whether existing or removed), buried fuel tanks, termite infestation, or asbestos insulation. Further, Seller warrants that, to the best of his knowledge and belief, there have been no suicides or murders on the property at any time, and that no part of the property has been used for any illegal or criminal purposes, including but not being limited to a grow-house operation. These warranties shall survive the closing of the transaction, but shall only apply to the circumstances existing on or before closing date.

With the above passage you can add in anything you like.

Some of the things you might want to add could include:

The existence of ghosts in the house

Ex-convicts (including sex offenders)as neighbours

A nude beach


Death by natural causes

Proximity to former garbage dumps or other health hazards


Radon gas

There was an interesting article in Real Estate Magazine recently that discussed some of these. Here is the link.


Further reading:

3 bedroom bungalow with a sex offender next door

Disclosure of material facts – suicide 

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