Stay informed with what sellers and sales representatives need to disclose. Mark Weisleder, a Partner at the law firm Real Estate Lawyers.ca LLP, has a great summary:

The topic to be discussed in this session is what sellers and salespeople need to disclose when selling properties. Here are 4 key lessons to remember:

  1. Patent or visible defects do not need to be disclosed
    If you can see a defect during a typical home inspection, it does not need to be disclosed by a seller. This can include a crack in a window, mirror or kitchen counter, a stain under the bed or damage to a wall behind a picture. The lesson is to be more diligent when inspecting a property before signing any agreement in the first place. Do not be shy about lifting small appliances from the kitchen counter or area rugs and try to make sure all windows actually open properly.
  2. Latent or hidden defects need to be disclosed by the seller
    Latent defects are defects that a home inspector could not see during a typical home inspection. If a seller knows about a material latent defect and does not disclose it, a buyer can sue the seller even after closing. Examples include water damages that have not been properly repaired, whether from the roof or basement, smoke damages from a fire, mold behind the walls, underground fuel tanks or foundation problems. If a buyer can demonstrate after closing that the seller must have known about the issue, they can be successful in taking legal action after closing. Buyers should be advised to conduct an insurance search against any property to see if a prior insurance claim was made by a previous owner.
  3. Psychological stigmas do not have to be disclosed
    Although the law is evolving, sellers do not have to disclose whether there has been a murder or suicide on the property or adjoining property or whether a pedophile lives on the same street. As this will likely matter to most buyers, google the property address to see if anything comes up, visit websites such as housecreep.com to see if there were any stigmas reported on the property and consider putting a clause right in the offer whereby the seller represents and warrants that to the best of their knowledge, there has been no murder or suicide on the property. Sellers must respond truthfully to this statement.
  4. Be wary of sellers who ask you not to disclose
    In my experience, sellers who request that you not disclose something that you believe should be disclosed are the same sellers who will try and blame you for anything that goes wrong or try and avoid paying commission if they can. In the circumstances, try and obtain written instructions from the seller lawyer for any matter that they do not wish to be disclosed and then also consult with a lawyer if you have any further questions.