Most realtors and lawyers agree that the Seller Property Information Statement is a dangerous form and will advise their home selling clients not to sign it.
The idea, I suppose is a good one. The Seller Property Information Statement must have started with good intentions – to give the buyer a snapshot of potential issues from the past and things to watch for in the future.
What is the Seller Property Information Statement?
Essentially, the Seller Property Information Statement requires the home seller to disclose any problem with the property. The statement is then legally bolted on (or baked in) to the Agreement of Purchase and Sale.
In Ontario, the Seller Property Information Statement (SPIS) is a three page questionnaire that asks home seller to answer questions with:
“I don’t know” or
The questions are grouped into the categories:
“Improvements and structural”.
Questions home sellers are expected to answer include:
Are there any drainage restrictions?
Are you aware of any excessive erosion, settling, slippage, sliding or other soil problems?
Are you aware of any deficiencies or non-compliance with the Ontario Fire Code?
Completeness and accuracy
“I don’t know” might seem to be the best way to answer, but honesty is the best policy (even if it costs you the sale). Sellers who fill out the form leaving out information that they consider to be irrelevant could find themselves in trouble. Seller’s who are proven to have lied on the form, lose in court. On the other hand, sellers that have provided complete and accurate information on the SPIS, have nothing to worry about.
The best policy is to refuse to sign it, in my opinion.
The form is controversial, so much so that we have a form to explain the form. Form 225 advises home sellers to fill out the SPIS “as completely and accurately as possible” and to “err on the side of caution”.
Fortunately, in Kitchener Waterloo we don’t see the Seller Property Information Statement very often. But, in other municipalities it is commonplace and red flags are raised when the form is not filled out.