What is the Disclosure Obligation to Customers in
Ontario Real Estate Source
By Brian Madigan LL.B.
Under the Real Estate and Business Brokers Act, 2002, a registrant is charged with certain responsibilities.
Customers are entitled to ”services” and their agents must act with competency, knowledge, skill and judgment.
This is the obligation to clients under the Code of Ethics:
Material facts
21. (2) A broker or salesperson who has a customer in respect of the acquisition or disposition of a particular interest in real estate shall, at the earliest practicable opportunity, disclose to the customer the material facts relating to the acquisition or disposition that are known by or ought to be known by the broker or salesperson.
Material Facts are actually a defined term under the Code:
“material fact” means, with respect to the acquisition or disposition of an interest in real estate, a fact that would affect a reasonable person’s decision to acquire or dispose of the interest;
It is difficult to appreciate the context without appreciating the definition of a trade in real estate in the Act:
trade” includes a disposition or acquisition of or transaction in real estate by sale, purchase, agreement for purchase and sale, exchange, option, lease, rental or otherwise and any offer or attempt to list real estate for the purpose of such a disposition, acquisition or transaction, and any act, advertisement, conduct or negotiation, directly or indirectly, in furtherance of any disposition, acquisition, transaction, offer or attempt, and the verb “trade” has a corresponding meaning;
So, this basically means that the agent must:
1) at the earliest practicable opportunity,
2) disclose to the customer,
3) the known material facts, and
4) the material facts which are unknown, but ought to be known.
Naturally, it would be wise from a risk management perspective that the agent recorded this information in some way, and was able to retrieve it later if required.
Brian Madigan LL.B., Broker is an author and commentator on real estate matters, if you are interested in residential or commercial properties in Mississauga, Toronto or the GTA, you may contact him through Royal LePage Innovators Realty, Brokerage 905-796-8888www.OntarioRealEstateSource.com
