Holiday Closure

The OREA office will close for the holidays at 12 p.m. Tuesday, December 24th.  Normal business hours will resume on Thursday, January 2nd.  Happy Holidays!

Holiday Closure

The OREA office will close for the holidays at 12 p.m. Tuesday, December 24th.  Normal business hours will resume on Thursday, January 2nd.  Happy Holidays!

July 6th - 2004

SPIS - don't leave the office without it!

REALTORS heading out to list or sell residential property should consider taking along a SPIS.

REALTORS heading out to list or sell residential property should consider taking along a SPIS. The SPIS (Seller Property Information Statement), typically completed by a seller at the time of taking a listing, offers protection for all parties, including the REALTORS involved in a transaction, by providing important information and helping to disclose known defects in a property.

OREA revised Form 220 - SPIS, in 2004 to create a basic form that applies to all property. By completing the form, the seller is providing general information relating to third party ownership interests, leases, easements, encroachments, surveys, zoning, restrictive covenants and taxes, to name just a few items.

Environmental issues include possible soil contamination, oil tanks and grow houses. Known structural problems, renovations and any moisture penetration are also disclosed. If any of the answers need further explanation, there is room at the bottom of the form for additional comments.

A new addition to the form is a statement that the SPIS does not provide information on psychological stigmas that may be associated with a property. This should be a warning to buyers to make their own enquiries, based on their own concerns. Stigmas might include a death in a home, natural or otherwise, "haunted" houses or other issues.

Form 221 is a Schedule that includes questions particular to condominiums such as the amount of the monthly maintenance fees and what they include, any special assessments, pending lawsuits, common elements, restrictions on use and the reserve fund.

For most rural properties and cottages, Form 222 would be completed which addresses issues such as the source of the water, its quality and quantity and the sewage system. For waterfront properties, the questions relate to accessibility, (including any applicable costs), shoreline improvements and shoreline road allowance.

There are two disclaimers on the SPIS stating that the information is not a warranty, however, sellers should always be advised to answer the questions accurately and completely in order to be able to defend against any possible future liability.

REALTORS should be cautioned that the SPIS does not take the place of a home inspection or a status certificate. It also does not eliminate the obligation imposed by Rule 11 of RECO's Code of Ethics to verify information relating to a property.

Common problems
While the SPIS is a valuable tool that all REALTORS should consider using at all times, there are two common problems associated with the form. The first is that sellers don't always fill them out accurately and completely. Some sellers would rather not disclose a problem that could affect the purchase price or even the saleability of the property. Unfortunately they may leave themselves open to legal action if a problem is discovered and it can be proven that the sellers were aware of it.

The second involves instances where an SPIS that revealed a defect was available but a buyer never received a copy. Since use of the SPIS is not mandatory in most areas of the province, it's not uncommon for REALTORS who don't use the form to overlook the notation on the MLS listing that an SPIS is available.

These issues and many others are examined in detail in OREA's continuing education course entitled: "Seller Property Information Statement - Don't Leave The Office Without It." The SPIS is also covered in the CE course, "Standard Forms."

Test your SPIS knowledge

1. If a buyer makes an offer conditional on a home inspection there is no need for the buyer to receive a copy of a Seller Property Information Statement.

True ___ False ___

2. Only patent defects need to be revealed on an SPIS.

True ___ False ___

3. There would be no liability on a buyer representative if a copy of an existing SPIS was not given to the buyer.

True ___ False ___

4. If a seller refused to complete an SPIS it would be a good idea for the listing salesperson to document that refusal.

True ___ False ___

5. A SPIS, when given to a buyer is stated to be a warranty by the seller as to the information contained in the statement.

True ___ False ___

Answers: 1. F, 2. F, 3. F, 4.T, 5. F

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For more information contact

Ontario Real Estate Association

Jean-Adrien Delicano

Senior Manager, Media Relations

JeanAdrienD@orea.com

416-445-9910 ext. 246

Ontario Real Estate Association
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