When it comes to buying or selling a home, transparency is key. Homebuyers naturally want to know everything about the property they’re considering, and sellers may wonder about their legal obligations in disclosing potential issues. In this blog, we’ll dive into the realm of real estate disclosures and explore what sellers and real estate agents are required to reveal to buyers.

Seller Disclosure: Balancing Known vs. Unknown Defects

Sellers often grapple with the question of what they must disclose to potential buyers. In general, the rule of thumb is to share everything. Full disclosure not only limits the seller’s liability but also fosters trust between the buyer and the property. However, let’s delve into some specifics.

A crucial factor in disclosure is whether the seller is aware of the problem at the time of the sale. If the seller can reasonably claim ignorance of a defect, they may not be obligated to disclose it. For example, if a home was constructed in 1986, and asbestos had been mostly phased out of building materials by 1980, the seller might argue they didn’t know about any asbestos in their home’s construction. This defense can often absolve the seller from disclosing the issue.

Understanding Different Types of Defects: Prioritizing Buyer Safety

  1. Patent Defects: These are issues that are relatively obvious and can be easily noticed by the buyer or a real estate agent during a routine inspection.
  2. Latent Defects: Latent defects are not readily observable and might require invasive inspection methods to detect. However, if they pose a safety hazard to the new resident, they must be disclosed.

Latent defects aren’t just about minor cosmetic flaws; they concern the safety of the property’s occupants. For instance, if the seller hears unusual sounds in the walls due to rodents, and it’s later discovered that these rodents have damaged the home’s wiring, this latent defect becomes a safety concern. Failing to disclose such a problem would likely put the seller in violation of disclosure laws.

Water Damage as a Latent Defect

Water damage and its consequences, such as mold growth, can indeed be considered latent defects, especially if they pose health risks. Visible mold is an obvious issue, but slow-growing mold hidden within walls may not be easily noticeable. To prove the seller’s knowledge of such hidden defects can be challenging.

What Real Estate Agents Must Disclose

Real estate agents are typically bound by a code of ethics that obliges them to act in the best interests of their clients, which often includes buyers. In some regions of Canada, real estate agents are required to fill out specific property disclosure forms that thoroughly examine apparent and potential defects. Even in areas where it’s not mandatory, agents may still use these forms to safeguard themselves and provide buyers with as much information as possible.


In the complex world of real estate transactions, disclosure plays a pivotal role. Sellers are encouraged to be as transparent as possible, even if not legally obligated, to avoid potential legal hassles down the road. Real estate agents, on the other hand, often act as intermediaries and facilitators in this process, striving to provide buyers with comprehensive information. Ultimately, a well-informed buyer and a forthright seller are more likely to have a smooth and successful real estate transaction. However, it’s crucial for both parties to be aware of the local laws and regulations governing disclosure, as they can vary from one region to another.