What is a Property Condition Disclosure Statement in BC?

Updated March 13, 2023 by Mike Stewart PREC

When preparing an offer on a property or if there is an accepted offer on residential real estate in British Columbia, expect to receive a package of documents from the Sellers Agent (or the seller). These documents allows the buyer to get detailed information about the property and its condition to make an informed decision on the purchase. One of the most important documents in this package will be the Property Condition Disclosure Statement (PCDS)

What is a Property Condition Disclosure Statement?

A Property Condition Disclosure Statement (PCDS) is a standardized document provided by the British Columbia Real Estate Association that requires a prospective property seller to honestly and accurately disclose any known defects, repairs, or other issues that could affect the value or safety of the property.

This disclosure of information in the PCDS by sellers allow a prospective buyer to make an informed decision on the purchase of the property.

The PCDS covers a wide range of topics, including the sellers clear and unambiguous knowledge of the condition of the roof, foundation, electrical and plumbing systems, heating and cooling systems, and other key components of the property. The seller is also required to disclose any past or current problems with the property, such as flooding, leaks, or pest infestations that they know of with certainty.

On top of filling out the PCDS with the assistance of their Realtor (The PCDS can be a VERY confusing document), the seller will initial the bottom of each page and sign the last page of the document.

What is the Purpose of the Property Condition Disclosure Statement in BC?

The PCDS was introduced in BC to require Sellers to disclose defects or issues that may affect health or safety that they may be aware of with their properties and gives buyers an opportunity an informed decision about the purchase of the property.

The home purchasing system in British Columbia is based on protecting Buyers by allowing them to make informed decisions on property purchases and the PCDS is a major part of this.

Are there several different types of Property Condition Disclosures in British Columbia?

Yes.

There are several versions of the Property Condition Disclosure Statement document (we have embedded strata Strata version for condos & townhomes for reference) for different types of existing buildings and properties in British Columbia:

• First Nations Leasehold Properties
• First Nations Leasehold Properties – HOA Schedule
• Land Only
• Rural Premises – Land & Building
• Residential
• Strata Title Properties
• Strata Title Properties – Bare Land

All of these document have a series of questions for prospective Sellers to answer that allow a potential Buyer of a property to know 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 (see below). The other versions on the PCDS will ask questions pertinent to the type of property in question.

Do Presales & New Properties Have Property Disclosure Statements?

Yes, new construction and presale condos have property condition disclosures.

These disclosure statements are significantly different than the PCDS for existing properties. That said, the new home or presale disclosure statement serve the same purpose as the PCDS for existing properties in that it allows a buyer the opportunity to make an informed decision on a property purchase, but in this case a new home that may not yet be constructed.

Presale disclosure statements are extremely detailed and comprehensive (often several hundred pages long with all of the addenda and are prepared by lawyers) and cover the following among other things:

• Name and career synopsis of the project developer
• Number of strata lots in the development
• Date the project is tentatively scheduled to complete
• Date on which the purchase contract expires if the project is not completed when the buyer can get their money back (“Drop dead date”)
• Floor space area of all the units in the project
• Location of the building on the site
• All exterior physical specifications of the building

New home and new condo developers are required to provide their buyers, as per REDMA or the Real Estate Development Marketing Act the legislation that regulates new home marketing in British Columbia, with a copy of the disclosure statement when a buyer writes an offer on new or presale property.

This disclosure statement also forms part of the purchase contract of the new home.

Can the PCDS be Included in a Real Estate Purchase Contract?

Yes.

A PCDS can (best practice in our view) 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 or misrepresents all known issues.

To have the PCDS incorporated in the Contract of Purchase and sale, the buyers realtor must include the appropriate clause in the contract and the buyer will need to sign, date, and initial the PCDS.

Is a Seller Required to Provide a PCDS When Selling a Property?

No.

A property seller in British Columbia is not required by law to provide a PCDS to a buyer in British Columbia.

There are several sources online that say a seller is required by law to provide a PCDS to prospective buyers when selling a property, but this is not correct!

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!

Is a Seller Required to Honest when Filling out a PCDS?

Yes.

There is a legal requirement that a seller must be honest and accurate when filling out a PCDS as a buyer will be relying on the information. Furthermore, a smart buyers agent will have a clause in their contract of purchase and sale that will make the PCDS become part of the contract. If a seller is not honest in their responses on the PCDS, they could face be subject to legal action.

Can the Seller Scratch Out the PCDS?

Yes.

Sellers of rental properties often may provide a PCDS, but will scratch out all the questions on the document and make no disclosure on the property.

Sellers of rental properties 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 honestly or accurately on a potentially legally binding PCDS.

Also, those selling properties they have not lived in but own or control such as inherited properties or a foreclosure, may also scratch out the PCDS as they may not know the condition of the property.

There are some legal opinions that sellers should never sign a PCDS.

In the event that a seller has scratched out a PCDS, it is advisable that the buyer and their realtor use other means for their due diligence including a home inspection, visits to city hall to review permits, strata document review among other options.

What if the PCDS is wrong or inaccurate?

If you caught the errors or inaccuracies before submitting an offer or during the due diligence/subject removal period, a buyer can request that a seller amend and initial their responses on the PCDS.

If a buyer finds inaccuracies, errors, misrepresentations after an offer has gone firm (subject free) or completed, it is advisable to check in with your Realtor and/or a lawyer.

Can I rely only on the PCDS?

When buying a property, the information in the PCDS should not be relied on by the buyer as a complete source of total information on the property property. It is advisable to do all the other forms of property purchase due diligence including, but not limited to, a home inspection, document review, visit to city hall, etc.

Is the PCDS a Guarantee on the Condition of a Property?

No, the PCDS is not a guarantee on the condition of the property and is only a disclosure of what the seller knows about the property. The PCDS is only part of the process of a buyer doing due diligence on a property.

Should I get a Home Inspection?

Reviewing the PCDS 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 (or might be trying to hide something…) about the condition of their property and cannot be relied upon to give complete or accurate information.

The PCDS should be a guide to further investigation on the property and your Realtor, Home Inspector, and lawyer should be able to answer any questions that arise.

Why does a Mortgage Lender need the PCDS with an Accepted Offer?

Once a buyer submits an accepted offer for financing, their mortgage lender will ask for a copy of the PCDS right away before any other documents.

Banks and mortgage lenders use the PCDS as part of their underwriting process to see if there are any red flags on the property they are potentially lending on.

Any delays in getting the PCDS to the mortgage lender will result in delays in getting the mortgage approval, possibly requiring an extension of the subject conditions, which may or may not be possible due to market conditions.