The Toronto Real Estate market is nothing short of complex. Dizzying terms, avante-garde marketing strategies, and the continuous update to rules and regulations are all factors that can contribute to your property-marketing headache. Its for reasons like this that you should turn to the expert advice of a REALTOR(R) to assist with all questions you may have. SPIS can be both beneficial and hazardous when marketing a property for sale. In this post, we’ll define the term SPIS, show a few examples of how it’s used today, and provide a few key rules of thumb to decide if using a SPIS is right for you and your property.
What is a SPIS?
A SPIS, or “Seller Property Information Statement”, is a document prepared by the seller containing useful, pertinent information about your property, such as known defects, hazards, renovations, or improvements. In Ontario, a SPIS is optional, but regulations could be imposed by your local Real Estate Board.
For example, lets say the area in which your home is situated is prone to flooding during heavy rainfall. When you first bought the property, you decided to implement some flood-proofing measures, such as installing or replacing a backflow preventer (a device to prevent drainage from backing up into your home), or repairing eavestroughing. These modifications have not only potentially improved the value of your home, they answer questions potential browsers and buyers may have, and remove hesitations with relocating to the specific area. Information like this could be provided in the SPIS to put buyers at ease.
Can I be held responsible for the information in my SPIS?
In short, yes. SPIS are considered legally binding documents and the seller can be held responsible if the information provided is incorrect. In addition to the requirement that a SPIS be accurate to the best knowledge of the seller, the SPIS binds the seller to disclose any changes to answers in the SPIS after completion. For example, if you are unaware of any air conditioner issues, and, after entering into an agreement of purchase and sale, are made aware of them, you are legally obligated to disclose the changes to the potential buyer. This was confirmed in a court case in 2011 (it was also found that the SPIS trumps the entire agreement clause normally contained in APSs).
Is a SPIS Necessary?
In Ontario, the standardized SPIS form contains over 40 different questions pertaining to the property. For most sellers, representing 40 different pieces of information about the property can seem daunting and is indeed a complicated process requiring thought and care. Especially with recent court cases in which SPIS were used as evidence, most sellers can be wary to complete one.
A SPIS is definitely not necessary when selling a home. In fact, it can create more headache than help. If your property has one or two issues that you may want to disclose, or a few added improvements, its best advised to take your information and market it elsewhere. If the buyer requests or conditions sale on an SPIS, try to negotiate for a home inspection instead.
At ReaLawState, we pair clients with an agent and a lawyer from day 1 of the real estate transaction. There’s no extra fee required, as legal fees are covered in the standard commission closing costs. A licensed Real Estate Sales Representative, and a highly-trained lawyer can assist with all aspects of the Real Estate Transaction and help answer any questions you may have. Still have questions about a SPIS? Contact ReaLawState today, and put your mind at ease.