If you’ve bought or sold a house in Manitoba you likely will have come across a document called the Property Disclosure Statement, essentially a required confession by the home seller about potential house issues. The form covers the gamut of details a home buyer might want to know about – everything to basement leaks, roof leaks, foundation cracks, and asbestos.
As a seller, it can feel like a death sentence to your sale to admit the quirks, problems, and history of your home. The form covers all the stuff we’d rather not admit. As a buyer, seeing that list of confessions can be freeing or frightening.
Whatever your feelings about it, there’s much more than meets the eye and what you don’t know CAN hurt you.
What is a Property Disclosure Statement
The Seller’s Property Disclosure Statement is form that contains a series of 19 yes or no questions relating to the property, and it isn't mandatory but often asked for as part of the process of selling. The form is completed by the seller, and then the buyer looks at it and decides if they’re okay with those answers or not.
You can check out a copy of that form here.
Buyer Beware: What You Don’t Know About Property Disclosure Statements CAN Hurt You
In my years as a Winnipeg real estate agent, I’ve seen over and over how buyers make the same assumptions about what Property Disclosure Statements mean. Let’s expose and debunk them right here.
A Property Disclosure Statement is NOT a Property Inspection.
The form and all its answers and confessions do not a property inspection make. This is only a snapshot of the property, not an indepth analysis, and certainly not by a professional. The seller may not be aware of a crack in the foundation – that doesn’t mean there isn’t one. The seller may not be aware that the building contain asbestos, and so won’t list it as an issue. And they wouldn’t be in the wrong about it, either.
A Property Disclosure Statement is NOT a Guarantee
The form may be thorough, but the answers are only based on seller’s knowledge and on what they remember at the time of answering. The form must be completed truthfully, and it does give the seller’s overview about what they know about the property as of the date they complete document, but it’s not a guarantee of state of property. It only represents their knowledge.
A Property Disclosure Statement does protect the buyer, but only to a point
The form is not a future guarantee of the home’s condition, but if a buyer was to discover and could prove that the seller knew of an issue, the statement will help them if they decide to pursue litigation. It’s expensive, time consuming, and mentally taxing, so most people don’t bother, but the statement is at least a measure of safety. At least, in the event that a pre-existing, known-about issue comes up, the buyers have the ability to seek some kind of justice.
How Buyers Can Protect Themselves for Real
Ultimately, it’s on the buyer’s head to inspect what they’re buying. Fortunately, there are absolutely ways to protect yourself as a buyer, and to know if you’re getting a good property.
The biggest favor any buyer can do for themselves is not only to hire a professional home inspector for an unbiased, independent inspection on the house, but to make sure that inspector is certified as an RHI, a Registered Home Inspector.
Here’s the thing about home inspectors: anyone can hang a shingle and call themselves a home inspector. Seriously. You reading this right now, could go start a home inspecting business. Scary, no?
It’s like high school in its very basic qualification process. RHIs on the other hand, go through a rigorous training, many additional hours (and at expense to them, so you know they’re serious), and are then evaluated and certified once they achieve a particular level of experience and excellence.
THAT’S the one you want inspecting your house.
THAT’S the inspector whose professional opinion you can trust.
It may not be a hard-core, solid, zero-risk proposition – after all, they’re not necessarily physically climbing into the attic or removing drywall to inspect the interior of each wall – but it’s the best, most expert assessment of a home’s health and integrity you can possibly get, and it WILL save you a lot of trouble.
It constantly baffles me when someone is considering a $300,000 purchase, but then hums and haws at a $500 inspection to ensure that enormous investment is even a good idea. To them I pass along the advice of Nike; Just Do It. You won’t be sorry you did. You might, however, be very sorry later that you didn’t… !
For more about how to hire a home inspector, I wrote this.
For a peek at the Manitoba Property Disclosure Statement, click here.
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