Checking the previous seller’s declarations, documenting your record and informing the buyer: Obligations to keep in mind

Are you looking to market a property? Has the immovable ever sustained damage due to events such as fire, water or contaminants? Has the area ever been the subject of development or construction projects left pending? How can you tell?

The consultation of previously completed description sheets and Seller’s declarations is an easy way to fulfil your ethical duty to verify and inform. It helps discover the existence of relevant information that may never have been brought to the attention of the current owner. 

The broker is required to take the necessary steps to check these previous documents and verify the accuracy of their content. All the documents verified by the broker must be placed on his record. In addition, the broker must document the steps taken in his record, whether or not the documents are found. For example, he may do so by placing on record a search report from the information listing service showing that the property has never been marketed.  

Consequences of a violation 

Any violation of these ethical obligations by the broker can have serious consequences, as evidenced by a recent decision that leaves no room for ambiguity in this regard (Moreau vs. Castiglia, 2017 QCCQ 2256).

In this case, the broker was found guilty of not advising the seller to disclose that the former Minister Pierre Laporte had been detained in the immovable and not ensuring that the prospective buyers are informed about it.

The Court of Quebec stated that it is not the broker’s role to presume the interest and the consequences of the information he holds, he must disclose it:

"[84] It’s the Committee that determines that the appellant should have disclosed the information. The broker did not have to filter what he knew. The fact was related to the property for sale; it is therefore relevant. The appellant erred in supporting the historical framework of the information. This is not the criterion to retain. Whether the fact related to the immovable is historical, structural, aesthetic, patrimonial, architectural, sanitary, political, economic, environmental or legal, insofar as it is not absolutely trivial or obviously impertinent, it must be reported as it may affect a party and the broker does not have to decide on its degree. His role is not to presume interest and consequences, but to disclose.”

In this case, the broker was fined $3,000 and ordered to complete a training activity.

Other decisions rendered by the Discipline Committee deals with the importance of respecting the broker's obligations in this regard:

• For failing to disclose that a suicide had occurred in the property, the broker was fined $4,000 and ordered to complete a training activity (OACIQ vs. Perreault, 2016 CanLII 87240);  
• For failing to notify the prospective buyers of the death of the previous owner, the broker had his licence suspended for a period of 30 days (OACIQ vs. Paradis, 2016 CanLII 40533);
• For failing to inform the prospective buyer that the inspector had noticed the existence of mould stains and recommended replacing the affected drywall, the broker had his licence suspended for a period of 30 days and was fined $2,000 (OACIQ vs. Poirier, 2018 CanLII 6411); 
• For failing to inform the prospective buyer of the presence of mould and/or fungus, the broker had his licence suspended for a period of 60 days (OACIQ vs. Brunelle, 2017 CanLII 68056).