How Do Vancouver Property Disclosures Work? – Ask Bruce Coleman, Vancouver Mortgage Broker
Canadian Mortgage News
CMI 101 Series
Dreyer Group 101 Series
Financial FYI Series
First Time Buyers
Home Buying 101
Home Insurance
Latest News
Mortgage Rates
Refinancing
Retirement Planning
Self Employed
How Do Vancouver Property Disclosures Work?
Every home or condo has its own distinct traits. Some home owners spend a lot of time in keeping up on their home maintenance with an attention to detail. Other home owners aren’t so fussy and let home maintenance slide. As a prospective home buyer, you don’t always get the full picture of what you might be buying.
Even though it is a requirement in B.C. that a home seller is required to disclose vital information about defects in their home such as leaks, mould, major repairs, foundation, and other issues, to their own realtor, or to you and your realtor, not everybody is as forthcoming and truthful as we would like to think.
Another problem that can happen is that even though the seller is being truthful about what they disclose, potential problems might exist which they are not even aware about.
In B.C. there is a quasi regulation that exists which does require that any maintenance or repair issues should be disclosed to all prospective home buyers. And, don’t forget that when you go to sell a home, these regulations also apply to you as well.
The biggest thing to remember is that any disclosure you receive should only be one part of the process because there is more you have to do to protect your interests.
B.C. Disclosure Laws Explained
First, you should know that the regulations that have put into pace will only provide you with limited protection. It always boils down to “caveat emptor” which means “buyer beware.”
The disclosure regulations is called the PDS which is an acronym for “Property Disclosure Statement” and was first introduced in 1991 through the efforts of the B.C. Real Estate Association. For condominiums it is also known as SPDS which means “Strata Property Disclosure Statement”, and for rural properties it is referred to as the RPDS or “Rural Property Disclosure Statement.”
In 2004, the B.C. Real Estate Association did amend the statement to specifically ask whether the home has been ever used as a marijuana grow-op or as an illegal drug lab.
How Useful is a Property Disclosure Statement?
The first thing to know is that a PDS is neither obligatory nor is it necessarily legally enforceable. The form is simply given to the seller to complete by their realtor. If the seller isn’t willing to complete one, then any prospective buyer might be wise to consider its absence as a “red flag” and be very wary about proceeding further.
Second, the property owner cannot necessarily be legally bound by what they disclose or include in the statement as it is simply designed for them to complete as best they can. There is no guarantee about the accuracy or the veracity of what a prospective buyer may or may not include.
The bottom line is that a PDS may actually not be as helpful as you think if you believe you have been deceived and want to take legal action against the previous owner. You may end shelling out a lot of legal expenses and end up having nothing to show for it except a big legal bill and expensive renovation or repair costs.
A PDS should only be used a guide and you need to check out the home further. Unless you are an experience contractor yourself, your best bet is to take the time and use an experienced home inspector to poke into the recesses of the home and uncover any potential problems they have found.
