Property Condition Disclosure Statement PCDS – The Real Estate Disclosure Statement BC Uses

Updated 1 January, 2024 by Mike Stewart PREC

What is a Property Condition Disclosure Statement or PCDS?

A Property Condition Disclosure Statement (PCDS) is an official document used in the real estate industry to allow a seller when they list a property for sale to disclose the condition of their property to a buyer.

Usually ranging from 3 to 5 pages, this statement is provided by the seller, offering a transparent account of the property’s current state, including any known defects, repairs, or issues that might impact the property’s value or safety.

It is a critical component of the property transaction process, ensuring that potential buyers are fully informed about the property they are considering.

In BC, these documents are provided by the BC Real Estate Association.

These disclosure statements cover 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 (if they fill out a real estate disclosure statement – BC does not actually require sellers to provide a PCDS) any past or current problems with the property, such as flooding, leaks, or pest infestations that they know of with certainty.

What is the Purpose of the Property Condition Disclosure Statement?

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

This document was part of the legislative response to the Leaky Condo crisis of the 1980-90’s in coastal British Columbia.

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

Property Disclosure Condition Statement BC

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 is a disclosure statement provided by the BCREA referred to as a Property Condition Disclosure Statement or PCDS or sometimes PDS.

Are there several different types of Property Disclosure Statements in BC?

Yes.

There are several versions of the Property Condition Disclosure Statement document (we have embedded strata property 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 – This document covers both the strata lot in question as well as the common property of the complex the unit is in.
• 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 this document will ask questions pertinent to the type of property in question.

Property Disclosure Statement BC – Single Family Houses

I have also included a Residential Property Condition Disclosure Statement below that is used for single family houses in BC.

Do Presales & New Properties Have Property Disclosure Statements?

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

Presale disclosure statements are significantly different than the documents provided by the BCREA for existing properties.

That said, the new home or presale disclosure statement serves the same purpose as the Property Condition Disclosure Statement for existing properties allowing a buyer the opportunity to review the disclosed information. This again is part of the home purchasing system in BC to allow a buyer 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.

This document can (best practice in our view) and should 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 property disclosure form 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 document.

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 PDS to a buyer in British Columbia.

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

If a Seller is not willing to provide this document they may not be disclosing a major issue with the property. The fact a Seller is not willing to provide this disclosure to a potential Buyer should be cause for concern to the Buyer. Proceed with caution!

Completing the Property Disclosure Form – Get Professional Help

It is highly recommended that sellers complete the property disclosure form with the help of their Realtor. Given that this document can be quite perplexing to understand—something many people find challenging—it is prudent to involve your Realtor in the process. Once filled out, the seller should initial each page at the bottom and provide their signature on the final page of the form.

It is important that a seller is honest and accurate with the information and responses they disclose with this document. Failure to do so may result in legal action against a seller. More on this below.

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 this document as a buyer will be relying on the information. The seller of a property in most cases has the most information on the property (if they live in the property).

A smart buyers agent will have a clause in their contract of purchase and sale that will make the PDS become part of the contract of purchase and sale (This is part of my standard purchase contract template). This provides an added protection for a buyer as anything inaccurate or misleading in the this disclosure may create liability for the seller.

There are consequences for sellers do not fill out a this document correctly. If a seller is not honest or accurate in their responses on the disclosure, they could face be subject to legal action do to breach of contract. To clarify – we are not lawyers and do not give legal advice. If you have questions about the legal aspects of a property disclosure please consult a qualified lawyer.

Can the Seller Scratch Out the PCDS?

Yes.

Sellers of rental properties often may provide a real estate disclosure form, 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 disclosure statement.

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 PDS 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 catch 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 real estate disclosure form.

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 disclosure 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 PDS is not a guarantee on the condition of the property and is only a disclosure of what the seller knows about the property. The disclosure is only part of the process of a buyer doing due diligence on a property.

Should I get a Home Inspection?

Reviewing the PDS 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.

This disclosure 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 document right away before any other documents.

Banks and mortgage lenders use the disclosure document 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 PDS 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.

FAQ on Property Condition Disclosure Statements (PCDS) in British Columbia

1. What is the meaning of PCDS in BC real estate, and why is it important for purchasers?

PCDS stands for Property Condition Disclosure Statement, a document in BC where sellers report known defects and the general condition of their property. It’s crucial for purchasers as it provides insights beyond what a reasonable inspection might reveal.

2. How does ‘buyer beware’ relate to latent defects in BC property transactions?

The principle of ‘buyer beware’ in BC puts the onus on the purchaser to discover any problems with the property. However, sellers are required to disclose latent defects—hidden problems not easily found during an inspection.

3. What is the role of a real estate agent concerning the PCDS in BC?

A real estate agent in BC facilitates the transfer of accurate information between the seller and purchaser. The real estate professional also ensures that the PCDS is filled out truthfully and correctly and that purchasers understand the implications of the disclosures.

4. How does the purchase agreement complement the PCDS in BC?

The purchase agreement is the official contract that binds the sale, incorporating the PCDS as a reference. It ensures that any material latent defect, a significant and hidden defect, disclosed or otherwise, is legally acknowledged.

5. What should a seller’s disclosure include regarding known defects in BC?

Sellers in BC must disclose all known defects in the PCDS, which includes any hidden defects that could affect the property’s value or structural integrity and might not be revealed by a reasonable inspection.

6. What are the implications for purchasers in BC if a latent defect is found after the sale?

If a latent defect is discovered after the sale, purchasers in BC can potentially seek recourse if the defect was known to the seller but not disclosed, as per the seller’s disclosure obligations.

7. What is the risk for property owners in BC who do not disclose a known defect?

Property owners in BC who fail to disclose a known defect in the PDS could face legal action from the purchaser, highlighting the necessity of full transparency in the disclosure of any known problems.

8. Can purchasers in BC waive the receipt of the Real Estate Disclosure Statement BC uses?

Purchasers in BC have the right to waive the PCDS, but doing so might leave them unprotected against undisclosed hidden defects. Therefore, receiving and reviewing the PCDS is strongly recommended.

9. Is a reasonable inspection by purchasers in BC sufficient to uncover all property defects?

While a reasonable inspection is critical, it may not uncover all hidden defects, emphasizing the importance of the PCDS, which requires sellers to report known issues that might not be visible upon inspection.

10. What are the consequences for a property owner in BC if a problem arises after the sale due to a nondisclosed known defect?

If a problem arises after the sale and it’s determined that the property owner in BC was aware of the defect and did not disclose it, they may be held legally responsible for nondisclosure.

In summary, understanding the meaning and significance of the PCDS in BC is essential for both sellers and purchasers. It ensures that all parties are aware of the property’s condition, supporting a fair and informed real estate transaction.

11. Does a strata PDS have a section for the strata fee and bylaws?

Yes!

There is a section in the document for strata properties that allows a seller to fill in the maintenance or strata fees. There is also several sections that deal with the bylaw documents as well as what the seller knows about the bylaws in the strata.

12. Does this document help buyers understand patent and material latent defects?

Yes!

There is a section requesting prospective sellers disclose any material latent defects. Learn more about patent defects here.