Property Condition
Disclosure Statement in BC

Make sure you obtain this document even before you agree on a purchase price

March 25, 2022

If you are thinking of buying a home in British Columbia, you’d better become familiar with a homebuyer protection document called PCDS, short for Property Condition Disclosure Statement. It is often included with the purchase agreement.

According to strawhomes.com, a BC real estate professional, “you should make sure you obtain this document even before you agree on a purchase price. And ask your real estate professional to include a time clause if you have not seen this document.”

When completing a PCDS and other disclosure documents, the seller must include information about known defects, such as mould. The seller is only obligated to disclose defects that are known to the seller.

When completing a PCDS and other disclosure documents, the seller must include information about known defects

However, this knowledge cannot be verified and it is best to have a professional home inspection. This is especially true if the PCDS is accompanied by other documents. In addition, the seller will be expected to report any unforeseen expenses, such as repairs or replacement of appliances.

What is a Property Condition Disclosure Statement?

If you’re selling a home, you are required by law in BC to provide a Property Condition Disclosure Statement and other financial statements to the potential buyer. This document details any existing problems with the property and explains how you can resolve them. The province of British Columbia has made this law mandatory for all sellers of residential real estate, so make sure if you are buying a home that your seller is in compliance and so sellers cannot engage in any misleading statement.

‘The province of British Columbia has made this law mandatory for all sellers of residential real estate’

A PCDS is a legally required document that asks the seller a series of questions about the condition of the property. While the seller does not have to provide the statement to the buyer, if he refuses, he’s not disclosing major issues. It’s important to be fully informed when buying a home, and a PCDS is essential to protecting both the buyer and seller.

It was devised by a real estate board for a reason. But you should still rely on professional advice, especially because buyer and seller are not issues that can cause public safety like heating systems, fireplace insert issues, and other items.

A Property Condition Disclosure Statement is a legal document that should be reviewed by a real estate agent and homebuyers before the sale is completed. This document is required for all residential real estate transactions.

‘A Property Condition Disclosure Statement is a legal document that should be reviewed by a real estate agent and homebuyers before the sale is completed.’

A real estate professional is highly recommended to handle this type of transaction. It’s important to have the proper legal counsel on hand when evaluating a property’s condition. Quebec has a different name for these disclosure agreement types. For the purpose of this article, we will focus on BC.

There Are Two Types of Defects Patent Defects and Latent Defects

In some cases, the vendor may have no knowledge of the defect and rely on the caveat emptor. In Canada, property defect law divides into two categories: latent and patent. A real estate professional can help you with the language. For now read on and we will attempt to explain it to you.

Patent Defects

Patent defects are easily detected by a prospective buyer, while latent defects may be hard to discover. A home inspector can detect patent defects, while a person can make reasonable observations or inquiries. An example of a patent defect would be a leaky roof, a stained carpet or an uneven kitchen countertop.

‘If a property has a defect, the buyer is responsible for it. This applies even if the seller does not disclose it.’

If a property has a defect, the buyer is responsible for it. This applies even if the seller does not disclose it. If the vendor knew of the defect at the time of the purchase, he cannot avoid the liability. A prudent buyer can easily detect a patent defect, but a professional inspector is highly recommended. It is important to hire a home inspector to check for any defects in a property.

Material Latent Defects

A latent defect is a defect that is not visible upon a reasonable inspection with reasonable effort. The owner of a property cannot waive the legal warranty of quality. As a result, the seller is liable for any defects, but not for any hidden or unrecognized ones. Unlike hidden defects, an apparent defect must be obvious to a diligent and prudent buyer. It may be impossible to prove that a particular item was defective at the time of purchase (especially when you have contaminated site services).

‘The owner of a property cannot waive the legal warranty of quality. As a result, the seller is liable for any defects, but not for any hidden or unrecognized ones.’

A buyer has two years to commence a lawsuit against a seller for a latent defect with a proper legal description. This period begins from the day the purchaser first learned of the defect or the day a reasonable person would have known of it. However, there are certain exceptions to this rule, and you should consult an attorney to get the right advice.

The real estate board of Greater Vancouver may also be able to help out with punitive damages, but only if it involves negligence or misrepresentation by a real estate professional.

Will the PDS automatically become part of the Contract of Purchase and Sale?

Ideally, this form should be completed by the seller before the sale and it should be incorporated into the Real Estate conditional Contract. A time clause should be included in this contract for a period of time so that a buyer can seek professional advice. Canadian provinces vary in their requirements for this document. So while it will not automatically be incorporated into the standard form contracts, it is very important you ask your real estate agent to include it.

‘The real estate board of Greater Vancouver may also be able to help out with punitive damages, but only if it involves negligence or misrepresentation by a real estate professional.’

A good property disclosure form will protect the buyer from the costs of repairing a home that is damaged beyond repair. The Property Disclosure Statement should include information that will protect the buyer from financial loss and other issues. As a buyer, it is best to ask about this document prior to signing the Real Estate Contract or agreeing to a purchase price.

What are the different types of defects I need to disclose?

The province of BC requires sellers to provide radon disclosures to home buyers. In addition to radon, the law requires sellers to disclose the presence of rodents, marijuana growth operations, any possible asbestos or septic tank problems (in case of rural land sale), foundation issues, etc. In other provinces in Canada, the seller may disclose other issues.

Should a Home Buyer Rely Fully on a PDS Document?

The answer is a resounding “yes”. The law requires a seller to provide supplemental disclosures that cover a wide range of topics. For example, a homeowner must disclose any problems with the septic system or sewer line. However, it’s always prudent to hire a home inspector and ensure you walk the property with the inspector.

Real Estate Professionals should recommend that their clients obtain legal advice before making this type of representation. Legal advice is key, especially with material latent defects or defending against misleading statements or other financial statements made by a real estate professional or by a disclosure agreement or by innocent misrepresentation.

New Construction Developer Disclosure Statements in BC

The Real Estate Development Marketing Act (REDMA) protects purchasers of new construction developments in BC. Under the REDMA, developers cannot enforce purchase agreements with buyers. Although the BC Fair Housing and Standards Act does not enforce purchase agreements, it can investigate complaints and take regulatory action against developers who breach the law. A disclosure statement lists all material facts about a development. If a developer changes any of these facts, they must file an amendment to the disclosure statement.

The REDMA does not prohibit informal communications between a developer and prospective purchasers. These communications can include changes in the project or construction updates. However, they are not grounds for rescission rights. Nonetheless, breaches of the REDMA can result in a cease-marketing order, administrative penalties, or even imprisonment. Despite the REDMA’s clear mandates and protections, many purchasers may feel misinformed or confused by the REDMA’s requirements.

‘A disclosure statement lists all material facts about a development. If a developer changes any of these facts, they must file an amendment to the disclosure statement.’

The REDMA is a set of rules and regulations for developers and purchasers. Under the Act, a developer is responsible for disclosing information to the public that will help protect consumers. The REDMA also regulates the disclosure of plans, fees, and other financial details. In case of a breach, the developer is not required to disclose all information about his project. If the developer fails to disclose all of these important facts, the buyer is entitled to rescission rights.

The Potential Risk of a Property Disclosure Statement

Using a property disclosure statement can protect a seller from legal trouble. However, if the seller fails to disclose certain items, the buyer may be able to find out about them, thereby limiting the risk of the transaction being cancelled early. A properly written disclosure statement is a legal requirement, and omissions could result in costly problems. Therefore, it is vital to get specialized inspections of the property with a formal inspection report, before buying it. A building inspection may be necessary to assess and aid with any potential legal issues.

A property disclosure statement requires sellers to disclose known hazards and problems. The seller has no obligation to hire a professional investigator and cannot be held liable for any problems discovered after closing. In addition, the seller is not required to disclose certain risks, such as a potential earthquake fault or fire or flood zone. The seller’s failure to disclose these risks can leave the buyer in a false sense of security. Again independent legal advice is key.

‘It is vital to get specialized inspections of the property with a formal inspection report, before buying it.’

A property disclosure statement must also disclose information on all renovations and improvements. The document must include information about any unpermitted work (without a building permit, or building permit applications with the land title office) or other changes that may impact the value or safety of the property and the real estate transaction.

A seller must keep a copy of the signed disclosure for at least three years. If they fix a defect, they must provide the buyer with the receipts. It is best to consult an attorney or real estate agent before fixing any defects.

Feature image: Wilhelm Gunkel – Unsplash

Other articles about Real Estate