The Property Disclosure Statement: What a Seller Must Say, and What a Buyer Should Do With It

A seller asked me last month whether she had to fill out the Property Disclosure Statement. She does not. No law in British Columbia requires it.

She signed one anyway. Refusing to answer raises more questions in a buyer's mind than any answer on the form would have.

What the form is

The Property Disclosure Statement is a standard form. The seller answers a list of questions about the property from their own knowledge: the roof, the plumbing, water coming in, work done, permits, oil tanks, strata matters, and more.

Two things about it matter more than the questions themselves.

It is voluntary. No provincial law makes a seller complete it. It is normal practice on residential resale listings and most buyers expect to see one.

It is often part of the contract. Many contracts of purchase and sale attach the statement and include a clause that makes it part of the agreement. When that clause is there, your answers become statements the buyer relied on when they agreed to buy. Read the contract and find out which version you are signing.

The line that decides most disputes

BC law splits property problems into two kinds, and almost every argument after completion turns on which side a problem falls.

A hidden defect is one that a reasonable inspection would not reveal. The legal term is a latent defect. A seller who knows about a serious one has to disclose it in writing before the contract is made. Rot behind a finished wall, a buried oil tank, a suite built without permits.

A visible defect is one that a reasonable inspection would reveal. The term is a patent defect. A cracked driveway, a stained ceiling, a sloping floor, a window that does not close. The seller does not have to point these out. Finding them is the buyer's job, which is what an inspection is for. Our BC home inspection checklist covers what a good inspector looks at.

The rules that apply to real estate licensees describe a material latent defect and list the kinds that count: a defect that makes the property dangerous or unfit to live in, a defect that would cost a great deal to repair, a circumstance where a local authority has given notice that something must be fixed, and a lack of the municipal building permits the property should have.

One more thing sellers should know. If a seller refuses to disclose a known material latent defect, the seller's own agent has a duty to disclose it to the buyer, or to stop acting for that seller. The agent cannot help keep it quiet.

"To the best of my knowledge" and the honest "I do not know"

The form asks what you know. It does not ask you to inspect your own house or to guess.

That makes "I do not know" a real answer, and a safe one when it is true. A seller who bought the house eight years ago and has no idea whether the previous owner had a leak can say so.

The answer that creates a problem is a confident "no" on a question where you had information pointing the other way. A "no" is a statement of fact. If a buyer relies on it and it turns out to be false, that is the ground most claims are built on.

When in doubt, answer yes and explain. A short note that says what happened and when gives the buyer something to investigate, and it protects you.

Five answers sellers get wrong

Water that came in and was repaired. A repair does not erase the history. The question asks whether there has been water ingress, and a past event is part of what you know. Say yes, then give the date, the cause, the contractor, and the outcome.

Work done without permits. A finished basement, a suite, a garage conversion, a deck, a wall moved. Missing permits are on the list of material latent defects, so this needs disclosing when you know about it. It applies to work a previous owner did, if you know about it.

A strata levy that has been discussed but not approved. The Form B Information Certificate reports levies that owners have approved by resolution. A levy council has talked about and never voted on will not appear there. A buyer would want to know, so disclose what you know and point them to the minutes.

Oil tanks. Older lots across Vancouver, Burnaby and the North Shore still hold buried heating oil tanks from the 1950s and earlier. An unused or abandoned underground tank is treated as a material latent defect, because a buyer cannot see it and removing a leaking one is expensive. Disclose a tank you know about, whether it was removed, and whether you have paperwork for the removal.

Grow-op or drug production history. This stays with the property in the record and affects both value and financing. Some lenders and insurers decline these properties. If you know the history, it goes on the form.

What a buyer should do with it

Read it, then go and check it.

The statement records what one person remembers on one day. It carries no warranty about the condition of the property, and it does not replace your own work.

Read the answers for what they avoid. A "do not know" next to a question the owner of ten years should be able to answer is worth a follow-up question.

Match it against the inspection. Give your inspector a copy before they attend. A disclosed past leak tells them where to spend their time.

Check permits yourself. The municipality holds the permit history for the address. A five-minute records request answers the suite question better than any form does.

Read the strata documents in full. Minutes, the depreciation report, the Form B, and the financial statements. A levy under discussion appears in minutes long before it appears on a certificate. Our guide to reading a strata depreciation report walks through what to look for.

This is also why removing your subjects changes the picture so much. Subjects are the window where all of this verification happens. Once they are gone, the disclosure statement is the only thing standing between you and a surprise, and it was never built to carry that weight. Our piece on subject-free offers sets out what you give up.

When a defect turns up after completion

The first question is always which kind of defect it was.

A problem a reasonable inspection would have caught usually sits with the buyer, even when it is expensive and even when it feels unfair. That is what the inspection period was for.

A known hidden defect that the seller concealed, or denied on the form, is a different situation. It can support a claim, and what the buyer can ask for depends on the facts, the wording of the contract, and how much was said before the deal closed.

If you are on either side of this, collect the disclosure statement, the contract, the inspection report, any listing material, and every text and email about the property. Then speak to a real estate lawyer quickly, because legal time limits apply and they start running earlier than most people expect.

How "sold as is, where is" fits

Sellers sometimes believe this clause ends the conversation. It does not.

The clause tells a buyer they are taking the property in its current condition with no warranty from the seller about that condition. It has real effect on visible problems and on the general state of the home.

What it does not do is give a seller cover for hiding a known material latent defect or for writing a false answer on the disclosure form. A seller who does that can still face a claim, and the clause in the contract does not repair a false statement made to get the contract signed.

If you are selling an estate property, a tear-down, or a home you have never lived in, tell your agent early. There are proper ways to sell with limited knowledge, and they involve saying so on the form rather than guessing at answers.

What this comes down to

• The Property Disclosure Statement is voluntary, and nearly every represented seller completes one.
• It is often attached to the contract, which turns your answers into statements the buyer relied on.
• Hidden defects you know about must be disclosed. Visible defects are the buyer's to find.
• "I do not know" is an honest answer. A false "no" is the one that creates a claim.
• Watch the five: past water, unpermitted work, a levy under discussion, oil tanks, and drug production history.
• Buyers: verify everything on it through an inspection, permit records and strata documents.
• "As is, where is" does not excuse concealing a known hidden defect.
• This is general information, and a lawyer should advise on your specific situation.
• Contact our team to go through a disclosure statement line by line, or browse listings.

Plan your next step

Work through house viewing so you know what to look at yourself before an inspector arrives, and use strata review when the property is a condo or townhome and the answers on the form depend on documents the strata holds.