Get the Docs!
When you are preparing to submit an offer on a property or have an accepted offer, you will receive a package of documents giving you detailed information about the property. One of the most important documents is the Property Condition Disclosure Statement.
What is it?
The Property Condition Disclosure Statement (PCDS) is a disclosure of what a Seller knows about their property. There are several versions of the document (see below) which has a series of questions for Sellers to give a potential Buyer a guideline of what the Seller knows about the condition of the property.
The Strata condo version asks condo specific questions such as parking stall numbers, locker numbers or whether the building has had water leaks, insect infestations, structural issues, etc
The Residential version for single family houses asks many of the same questions, but asks questions more relevant to this type of housing.
Why do Buyers need a copy of the PCDS?
The PCDS was brought into use in BC to allow Sellers to disclose defects they may be aware of with their properties. Buyers need as much information as possible about a property they are interest in buying so they can make an informed decision. A PCDS can be incorporated in and form part of the Contract of Purchase of Sale, which may (confirm this with your lawyer) provide a Buyer legal protections if a Seller does not disclose all known issues.
Is a Seller Required to provide a PCDS in BC?
A Seller is not required to provide a PCDS in British Columbia. If a Seller is not willing to provide a PCDS, they may not be disclosing a major issue with the property. The fact a Seller is not willing to provide a PCDS to a potential Buyer should be cause for concern to the Buyer. Proceed with caution!
Of less concern, very often Sellers of tenanted properties may provide a PCDS, but will scratch out all the questions on the document. Sellers will do this because they have never lived in the property or have not lived in it for a considerable amount of time and therefore do not know enough about the condition of the property to comment.
Don’t Rely On the PCDS
When buying a property, information in the PCDS should not be relied as all the necessary information a Buyer needs about a property. Furthermore it should not be seen as means to avoid the cost of getting a home inspection by a qualified Home Inspector. ALWAYS get a home inspection! Sellers very often have limited knowledge on the condition of their property and cannot be relied upon to give complete or accurate information. The PCDS should be a guide to further investigations on the property and your Realtor, Home Inspector, and lawyer should be able to answer any questions that arise. The PCDS should form part of a package of documents a buyer receives to allow the buyer to make an informed decision on buying the property in question.
I welcome questions and comments on this blog!
British Columbia Property Condition Disclosure Statement Strata Title Properties
British Columbia Property Conditional Disclosure Statement Residential
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We just purchase a home where the seller did not disclose major foundation cracks that were not accessable to the inspector because there was furniture and supplies hiding the defects. The day we moved in I found one of them in plain sight. There are also water stains on the slab. We went over the PD form meticulously looking specifically for structural damage and they said nohing about the cacks.
Both of our signatures are on this form and we used it and the inspection report to make our decision and now we own a home that is sliding down a hill! I keep hearing that the PD form is not binding to the contract but how can that be when we both signed it? We will be taking the sellers to court to recoup losses… Is this document useless to us and if so, why even have it there as it misleads us NGO believing the property is sound?please tell me I’m wrong.
Hi Rudy,
Good to hear from you and sorry to hear about what happened.
It sounds like you have contacted a lawyer, which is exactly what you should in a situation like this.
I am not sure what jurisdiction you are in, but in British Columbia its best to have the offer or Contract of Purchase and Sale state that the Property Condition Disclosure Statement be added to and form part of the Contract of Purchase and Sale.
We do this so that if anything is left out of the PCDS or misrepresented in the PCDS, you as a Buyer MAY (Confirm this with your lawyer!) have grounds for legal action against the Seller. This is the main way to ensure that the PCDS is something you can use to go after a Seller who may have left something out or misrepresented something. (Confirm this with your lawyer!)
Thank you very much for commenting and I look forward to hearing more from you.
Hello Mike.
We didn’t sign anything other than the documents that our realtor and conveyance lawyer provided.
This got me worried. I couldn’t understand how the PCDS wouldn’t be part of the contract when we have both of our signatures on the bottom of it and it was a key factor in the purchase of the house. Why have the form if it’s not worth the paper its written on? If anything, the form itself would be misleading and one would hope that their realtor pointed out its uselessness as you were signing it.
Regardless, My wife pulled out a piece of paper for me this morning – it was the first page of our contract. It reads…
CONTRACT AND PURCHASE OF SALE ADDENDUM
The above mentioned property, the undersigned hereby agrees as follows:
To remove the following subjects
-subject to the buyer on or, before (date) approving the Property Disclosure Statement dated (date) with respect to the information that reasonably may adversely affect the use or, value of the property. If approved, such a statement will be incorporated into and form part of the contract.
This condition is for the sole benefit of the buyer.
We went over the PCDS and approved it. I’m not a Judge but, to me it appears that it should now be incorporated into and form part of our contract. Not holding my breath.
Thank you for your advice.
Rudy.
Hi Rudy,
Good to hear from you.
Have you contacted a lawyer yet?
If not, I would strongly suggest you do. A lawyer will not charge you to meet with them and for initial advice. If you are going to take legal action, your lawyer fees may be paid by the Seller if you are successful in your lawsuit.
Your assessment makes sense, but you need to talk to a lawyer as soon as possible about this situation to ensure your interests are looked after especially if you are thinking about taking legal action against the seller.
Thank you very much for sharing your experience with the PCDS. Please let me know how it goes, as I think readers would be very interested to know how this turns out.
Hello Mike.
So far, we have talked with our lawyer and he agreed to represent us. He advised us to get both a structural and geotech inspection – which we did – and we are about to start dismantling the interior to have movement detection equipment installed on the cracks.
After moving more of the sellers remnants away from the exposed foundation walls, I found another area where he patched more seepage areas with mortar. We had our first rain in months and there is now noticeable moisture at the “repair” sites… I am absolutely furious that this wasn’t mentioned on the disclosure.
We are at a loss as how to approach this. The savings that we have were supposed to go toward updating this home and finishing the basement for our business space. Our first mission in the house was to build a 2br rental suite and our offices but, what’s the point if I have to rip it all down to repair the foundation?
I have heard that it can take up to 2 years to have our case heard in Supreme Court… just waiting for compensation could financially cripple us.
My advice to anyone reading this thread is to pay special attention to the condition of the foundation and drainage systems. If things are piled up against the walls then ask them to remove them. Read over the property disclosure statement and ensure that it is written in as part of the contract – had we not done this, our lawyer tells us we would have a difficult time in litigation.
Thanks for your help.
Rudy.
Hi Rudy,
Good to hear from you and thank you very much for sharing your experience. I’m glad to be of assistance.
I’m very sorry to hear this happened to you and that you guys have to incur these unexpected and unfair costs.
I’m glad to hear you’ve got a lawyer working on this. When in doubt, calling a lawyer for advice is always the best course of action to protect your interests.
Your experience is EXACTLY why I stress the need to have a clause in any Contract of Purchase and Sale that EXPLICITLY states that the PCDS will be included in and form part of the Contract of Purchase and Sale.
I am very interested to hear how this turns out and would love to hear more from you. And I also hope you and your lawyer are able to nail the slimy bugger who sold you that house!
How can a document such as the PCDS serve in the public’s best interest? Sellers are being asked questions that are beyond the scope of their expertise and knowledge. Innocent mistakes can be construed as misrepresentation and are an invitation to litigation.
These Disclosure forms, are usually completed by homeowners who are “totally unqualified to give opinions on the state of electrical, plumbing, structural integrity, drainage, environmental etc.”
Realtors have ethical and legal duties are to protect the seller’s best interests. How could they possibly recommend that the seller should enter this minefield by completing an PCDS?
Unfortunately, many realtors are still casually laying the document on the table and handing the sellers a pen to fill out the form without any discussion about the implications.
Remember that realtors all have errors and omissions insurance for lawsuits, the average homeowner does not!
Sellers who sign SPIS forms and agents who encourage them to do so are asking for trouble.
Hi Brandon,
Good to hear from you and thank you very much for commenting!
You bring up some very good points and I agree with most of what you’re saying. Where I disagree is in how a PCDS serves the public interest.
The PCDS protects Buyers from misrepresentation by Sellers about the condition of properties being sold. This is why the use of the PCDS is in the public interest.
The use of the PCDS was brought about as a result and response to Vancouver’s Leaky Condo Crisis to protect Buyers.
Please note – A PCDS is only a disclosure of what a Seller KNOWS about a property. If you have a look at the examples above, there is a “Do Not Know/Does Not Apply” option for a Seller to check off for nearly every option.
If a Seller is, as you say ““totally unqualified to give opinions on the state of electrical, plumbing, structural integrity, drainage, environmental etc.” then their Realtor should suggest that those Sellers fill in the “Do Not Know/Does Not Apply” options or leave the PCDS blank, which is commonly done with rental properties a Seller has not lived in or not lived in for an extended period of time.
I think you’re referring to my Comments on Real Estate Talks where I asked if the Buyers had received a PCDS and if they had a home inspection done.
Sellers of a property have an obligation to disclose latent material defects (problems with the property that cannot be seen) to a Buyer that the Seller is AWARE of.
In the case on Realestatetalks (The details are sketchy to say the least), The Sellers Realtor “forgot” to disclose to the Buyers the fact house was a grow op. The Realtor would have presumably found out this information from the Sellers.
The PCDS would have either disclosed to the Buyer that there was an issue or if the “Do Not Know/Does Not Apply” option was filled in or the PCDS was scratched out, the Buyer would have known to investigate further.
This to me seems to be a willfull non-disclosure by the Sellers of a latent material defect that was specifically left out of the PCDS if one was even filled out or give to the Buyer. If I was the Buyer, I would have called my lawyer with an eye to sue the pants off the Sellers.
If the Buyers had a good Buyers Agent, the Buyers Realtor would have had a clause in the Contract of Purchase and Sale stating the PCDS form part of Contract, which may allow the Buyers legal recourse over this issue of non-disclosure (Confirm this with your lawyer). Furthermore, a good Buyers Agent would have insisted on receiving a PCDS and if one was not forthcoming, informed the Buyers of the implications of non-disclosure (ie there could be a MAJOr problem the Sellers don’t want to disclose) based on the refusal to give a PCDS.
A good Listing (Sellers) Agent will go through the Property Condition Disclosure Statement with their clients (The Sellers) to ensure they understand the document and that they are not open to litigation based on what they disclose the PCDS.
I think the PCDS serves the public interest for both Sellers and Buyers, as long as both are getting good advice from qualified Realtors and Lawyers. Its when there is a lack of this good advice that the PCDS can cause problems for Buyers and Sellers.
What is an SPIS?
What are your thoughts Brandon?
Though, the seller may not be qualified to make those assessments about their property, the document plainly states on the first subheading that they are responsible for the accuracy and where uncertain should reply “Do not know”. I have sold homes with that same document and in each case, I answered openly and honestly in an attempt to be fair and also, to relieve myself of the possibility of being sued. So, what would happen if one of the homes that I sold happened to have defects that I wasn’t aware of, or wasn’t qualified to assess? I could be held liable for statements that I made on the PCDS.
Say someone bought a home for 350k and bought it believing that the property’s market value what somewhat near what they paid. Upon taking possession and within the first hour of moving in, they find structural defects and signs of water ingress into the basement that weren’t disclosed. At that moment, if the buyers immediately turned around and attempted to sell that property, they would be faced with signing that very same PCDS document. They might attempt to pretend that they knew nothing about the defects and take their chances on being sued for misrepresentation. They could also take responsibility for the defects and answer “Yes” to question 3.G and 3.K. If they do answer “Yes” then they are bound to take a major loss… let’s say $50,000. Who’s going to buy a home at market value when it needs 50k in repair? Regardless, they now own a home worth 300k and the seller is holding 350k… the home was worth “X” on day 1 and on day 2, the home is worth “X” less 50k… and all because the seller answered “No” to those 2 questions. ”
It doesn’t matter what the PCDS says, the result of the transaction is that the buyer has taken a major loss and the seller avoided the costs of necessary repairs. The outcome of the contract is that the transaction was unfair. The only thing holding the transaction together is the contract. If there is a breach within the contract then the contract is void. It is up to the seller to understand that when they sign the PCDS document, they are responsible for not just the answers that they give, but the impression that they are giving to the buyer. If you say the house is worth 350k and sign documents backing up your claim… then the house had better be worth what you’re claiming. If the buyer has to fix perimeter drainage to prevent unreported flooding and has to have engineered structural stabilization to correct unreported structural defects, then the buyer is responsible for the costs incurred. It has to be this way because anything else would be unfair… lawless. Contracts would become meaningless if the terms they were written in were built out of misinformation and half-truths.
Somewhere down the line, someone has to take responsibility for the condition of the home; that starts with the sellers PCDS. The seller is responsible for ensuring that their statements are accurate and true. If they are unsure about it, then they need to either mark “Do Not Know” or take measures to find out. If the buyer jumps through all the hoops and gets a signed disclosure and a certified inspection, then their legal obligations should be fulfilled. If either document is found to be misrepresented and/or fraudulent, then the buyer has full right to expect compensation, or rescission of the contract.
The seller isn’t putting himself at risk by signing a PCDS. If the seller understands the contract terms and fills out the PCDS correctly, then they don’t have anything to fear. If there wasn’t a giant crack, or a flooding basement at/or before the time of the sale then all is well; the seller can defend himself successfully in court. If there was a giant crack and there was a flooding problem and the buyer was not adequately informed then… good luck. If you choose not to disclose facts that would affect the offered price on the home then you are, by all counts, either negligent or fraudulent and the buyer has every right to come after you.
Hi Rudy,
Good to hear from you and thank you for getting back to us!
The PCDS is a very important document to protect a buyer, BUT it should not be the only resource a buyer should use for their due diligence when buying property in BC.
I can’t stress this enough. ALWAYS get a home inspection by a qualified home inspector!
If you’re in a situation where an area of the property is not visible or accessible because the Seller doesn’t want to take action to make these areas viewable or accessible, you should INSIST that you and your inspector see these areas before you remove your subject to financing! Don’t be afraid to push a Seller on this point.
Informed consent, by way of a home inspection and having a full and complete set of documents on the property in question, is required to move forward with the Contracts of Purchase and Sale I write.
How did everything turn out with your house with the water issue in the basement?
Looking forward to hearing from you!
A “Qualified” home inspection does not necessarily mean that you are getting all of the information.
At our inspection, our realtor had other appointments and refused to allow us to attend the inspection without his presence (some kind of regulation). What we got was a 1/2 hour rundown of the house after the inspector inspected it. In that time, he did not mention anything about the clutter covering the foundation walls or the flood stains on the floor; we didn’t even notice it because the walkthru was so rushed. We were in the area with him, but he didn’t tell me that there were places where he didn’t look, he just pointed out a couple of minor issues in the room and then moved us on to the next one. He took a photo of the area where the seller had piled his junk on top of everything, but did not mention it and did not include it in his final report. It wasn’t until I called him about the cracks that he said he had a photo of the area and then sent it to me.
One would think that a signed PCDS and a 75 page inspection report
would be enough information to make a sound decision. I trusted that the seller was being honest and I trusted that my home inspector was being thorough, but that wasn’t the case at all. We did our due diligence buy hiring a licensed inspector and signing the PCDS into the contract. I understood that those documents were an accurate representation of the property’s condition and they were not. I thought that those documents offered some kind of legal protection well… that is up to the courts to decide.
I don’t want to sue these people. I don’t want to be a plaintiff. I don’t want to be putting out thousands of dollars in technical reports and lawyer’s fees. I don’t want to be watching my home slide down a hill while I’m mopping up after every rainfall. I want the home that I believed I was purchasing, not the broken, leaky one I’m in now. Why should I have to take the hit for this?
This will be the last time I purchase a home without a recorded discussion the PCDS with the seller and without accompanying the inspector during the inspection. I will never put my trust in another sellers PCDS or inspection report again because I have seen first hand what happens when they are wrong… and it isn’t pretty.
Hi Rudy,
Good to hear from you and thanks again for sharing.
I’m sorry to hear about what happened to you guys.
You bring up good points.
Its is very important for Buyers to be present at an inspection.
It is also very important to be picky and fussy and not be rushed. If you’re not happy or comfortable with whats happening at the inspection, don’t remove subjects.
Your offer should be subject to the buyer receiving and approving a home inspection. If you don’t approve of what went down with anything to do with the inspection, kill the deal.
Make sure to do your homework on your inspector. Ask people you know and trust to refer you to someone they’ve worked with and were happy with.
If you have doubts about your inspector, question them.
Home purchases are a huge investment and we who are in this business want to be sure that these things don’t happen to our clients.
It sounds like the matter is before the courts and I hope you’re able to nail the Sellers for what happened.
Keep us posted.
Hi my name is Sato living on Northen BC. we bought a home in Nov 2010 and 2 month later (January 2011) we had a wet basement(enough water to get mold and rotten). on the statement of disclosure, seller said there is no moisture/water in the basement. then i complained to my realtor(remax) we had a water in a basement. my realtor tried to contact seller whether they had a wet basement or not. then seller said they had a water in the basement before thats why they instal sump pump. we were so upset because seller didn’t report disclosure statement properly and accurately. i have talked with lawyer and said you can bring small claims court.
my question is as i am a buyer. what is my probability to win this case?
any idea? please help me out.
Hi Sato,
Good to hear from you and thank you for taking the time to comment.
I think you did the right thing by talking to your Realtor and to a Lawyer.
I am not a lawyer, so I can’t give advice on probability of success to win this case.
What did your lawyer say about the success of a lawsuit in small claims court?
A lawyer would be the person best qualified to comment on the success of your lawsuit. Also keep in mind that if you’re not happy with the advice of the first lawyer you can always try another.
What are your thoughts?
Thanks for the comments Mike.
i kind research this kind of issues and found the similar case in ontario.
The question ” are you aware of any water/moistrure in your basement?”
it is present tense, so a seller can answer “no” if there is no water right now. But the court in Ontario said if you have a history to repair or fix, you have to repoort that. so the seller should have written comments in PDS, so buyer won the case.
In BC, is properyt disclosure statement(PDS) is legally binding? some website said there is not mandatory to fill PDS in BC. is that true?
when you help seller to fill PDS, do you suggest to answer questions as a present tense?
i havent asked my lawyer about probability of win. she just recommended to bring to small claims court. i will ask and also try to get second opinion from another lawyer.
anyways, thank you for listening my complaint. Mike.
God bless you!
Hi Sato,
Good to hear from you.
A PCDS is only legally binding if your Realtor inserts a clause in the contract saying the PCDS forms part of the contract.
Its a very subtle and innocuous term in the contract, but can be very powerful in these situations.
I would show your lawyer the contract to make sure its in there.
Please do keep us informed about your progress!
Best of luck and thanks again for commenting!
To Sato:
My advice would be to try to keep a calm and cool head about this. My wife and I have gone through hell over our situation and even though we’ve finally come to acceptance, I still have moments of extreme worry and anger… but it gets you nowhere in the end. Just remember that your house still has value and the damage can be repaired. Remember that you still have a roof over your head and you live in a country that is mostly civil and has a somewhat functional legal system. Many people have less than that.
I am not a lawyer, but with the amount of research I’ve done, I might as well go and write the Bar Exam. The PCDS isn’t binding unless it is written into the contract of sale. Normally, a good realtor will include this in the contract – you will find it on the original contract of sale. It will state that once signed, the PCDS will become part of the contract. It also states that it covers any defects that adversely affects the value of the home – something not covered in the PCDS itself. Even if that clause is not on the contract, you can still persue it in court. The PCDS is intended to allow the buyer to make an informed decision on the purchase; if there is misleading information on the document then the document should never have been presented because it sways the buyer into an uninformed decision… it is called misreprestentation and even a verbal statement can be construed as such. If the seller verbally states that there is no flooding and you have a witness to the statement, it is admissible in court. People have successfully sued sellers for failing to mention that the reason they are moving is to get away from the loud neighbours who party all night long.
If your seller had flooding and tried to fix it with a sump system then they did due diligence. If they sold the house and didn’t test the system for functionality, then they only performed half of the repair… part of repairing something is ensuring that it actually works, No? So, if you are now experiencing flooding then it is up to the seller to complete the repair.
I would also like to hear how your situation works out. I encourage you to persue the cost of repair; if not only for your own financial compensation, you should do it to set a president of how our real estate system should operate. If we allow people to get away with contractural fraud, then it will remain an accepted form of bargaining and that is simply wrong. Again, try to remain objective. You have water in your basement… not a nuclear waste dump.
Hi Rudy,
Great to hear from you and WOW, what a great explanation! My explanations pale in comparison!
Thanks for the great comment and I hope all is well with you guys!
Hi All,
You might find this link interesting!
http://www.bcrea.bc.ca/publications/legally_speaking447.htm
It talks about how Courts in BC look at disclosure on the PCDS.
Interesting reading if you’re having an issue with a PCDS.
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I recently purchases a house in April 2012. A few month of living there we had carpenter ant problems. Turns out the seller knew of seasonal carpenter ant problem and got exterior treatments every spring. Did he have to disclose that to us on the PDS? Since he filled the PDS out when ant were dormant?
Thanks
Hi Bethany,
Good to hear from you and thank you for taking the time to comment!
I’m sorry to hear that things turned out this way.
The Seller has an obligation to disclose everything they know about the property if they fill out the PCDS and quite possibly the issue you have.
This could very well be a latent material defect and if it was left out of the PCDS this could be bad for the Seller.
Have discussed this with your Buyers Agent? I would suggest speaking to your Realtor and also talk to a lawyer.
A lawyer is not going to cost you anything initially and they can give you a fairly good idea of your options for going after the seller and/or getting the problem worked out.
What are your thoughts?
I have discussed with buyers agent and they agree it should have been disclosed.
I am taking to small claims.
The previous owners are saying that the date they filled out the PDS and the date they moved out they did not have an infestation of ants. They claim that they never had a infestation, but only maintained the problem from becoming a full on infestation.
They have confirmed in email that they did have exterior treatments on the house 2 years in a row and planned on doing treatment again to maintain the issue.
I am only looking to get back costs of treatments and damages.
Do you have any good links that perhaps Council could provide in regards to history needing to be disclosed on PDS?
Thanks for your help!
Hi Bethany,
Good to hear from you.
I would still suggest speaking to a lawyer even if you’re handling it your self in small claims court.
I’m afraid I don’t have any links from Council on that.