A Seller Property Information Statement (“SPIS”) is a form that allows a seller to provide additional information about their property. In Ontario, it is prepared on an OREA Standard Form 220. Importantly, a seller, and their realtor, are not required by OREA or at law to prepare an SPIS for their property. The decision to fill out an SPIS is voluntary. However, once a seller decides to complete an SPIS, he or she must take special care to ensure the accuracy and completeness of the information provided in this document.
Misrepresentations contained in an SPIS can form the basis of a lawsuit in Ontario. Once the seller makes disclosures in an SPIS, it is reasonable for a buyer to rely on it to make a purchasing decision. Sellers must ensure they have filled out the SPIS honestly, diligently, and completely. The defence of buyer beware (caveat emptor) will not protect a seller who makes a negligent or misleading statement in their SPSIS. Generally, while a buyer has an obligation to independently verify key aspects of the property they wish to purchase, this duty does not extend to verifying representations a seller has made through an SPIS. In some instances, a partial answer may be found to be misleading, amounting to misrepresentation. This may entitle the buyer to rescind the Agreement of Purchase and Sale ("APS").
Bottom line, tread carefully and diligently when completing an SPIS, as a vendor. As a buyer, you may want to consider incorporating SPIS statements as part of the final APS or ensure there is a clear record of you receiving and relying upon the information that was disclosed through the SPIS.
Sam Presvelos and Evan Presvelos are civil lawyers located in Toronto, Ontario. They have comprehensive experience in dealing with residential and commercial real estate matters including APS breach by both sellers and buyers as well as real estate agent negligence claims.
Disclaimer: The above article is intended for an Ontario audience and is for informational purposes only. This article does not constitute legal advice and should not be taken as such. Reading this article on our website also does not give rise to a solicitor – client relationship. You should always speak with a lawyer about your specific situation if you require any legal help and representation.