What's Your Unit Worth Right Now?
Get a free AI-powered price range for your condo in under 90 seconds — floor, exposure, view, parking and locker included. No name or address required.
Get My Free Estimate →Ontario resale housing runs on caveat emptor. A seller need not disclose a patent defect — one readily apparent to someone exercising reasonable care — but must not conceal it, because active concealment removes the defence. A seller must disclose a latent defect, but only where it clears a real threshold: one that “would make a property unfit for habitation, dangerous, or potentially dangerous” and is not apparent on reasonable inspection. Merely expensive is not enough. Under O. Reg. 567/05 s. 22.1 a registrant must “take reasonable steps to determine the material facts” for a client — an active duty, not a passive one — and under s. 22.3 a listing agent who knows a seller has completed a property information statement must disclose that it exists and provide it on request. Stigma is different: RECO states that “stigmas are not explicitly addressed in the legislation”, so there is no duty to disclose a death, a crime or a remediated grow operation. Claims run two years from discovery under s. 4 of the Limitations Act, 2002, with a fifteen-year ultimate limit.
Ontario resale housing still runs on caveat emptor — buyer beware. That startles people, because it is not how anything else you buy works. But the rule has real limits, and the limits are where every dispute lives.
This page sets out where the line falls between a defect a seller may stay silent about and one they must disclose, what my own regulator requires of me when I know something, why stigma is treated completely differently, and what a buyer can actually do when something surfaces after closing.
Patent and latent: the distinction the whole thing turns on
| Patent defect | Latent defect | |
|---|---|---|
| What it is | Readily apparent to someone exercising reasonable care in inspecting the property | Not readily apparent on such an inspection |
| Must the seller disclose it? | No. RECO: “A seller does not have to disclose a patent defect to a potential buyer — it is a case of ‘buyer beware’” | Yes, where it meets the threshold below |
| The catch | RECO: “a seller should not attempt to conceal the patent defect or ‘buyer beware’ may not apply” |
Not every hidden problem is a disclosable latent defect. My regulator’s formulation sets a real threshold: a latent defect is one that “would make a property unfit for habitation, dangerous, or potentially dangerous” and is “generally not apparent to someone exercising reasonable care”. Both halves have to be satisfied.
So a hidden defect that is merely expensive is not automatically disclosable. A hidden defect that makes the house unsafe or unliveable is. That is a narrower duty than most buyers assume and a wider one than most sellers hope.
Ontario case law has long recognised four situations in which a vendor can be liable: the vendor need not call attention to patent defects, the rule being caveat emptor; where there is active concealment of an otherwise patent defect, the general rule will not apply; liability for concealing latent defects known to the vendor; and liability for fraudulent misrepresentation about latent defects.
Active concealment is the one that turns a safe position into an unsafe one. A crack you leave visible is the buyer’s problem. The same crack behind fresh drywall put up the week before listing is a very different conversation, and the fact that it would have been patent is no longer a defence.
What the regulation requires of me
These are my obligations, not the seller’s, and buyers are entitled to know what they are. The operative rules are in O. Reg. 567/05 under the Trust in Real Estate Services Act, as amended for TRESA in 2022 and 2023.
To my own client: an active duty to investigate
22.1(1) “A broker or salesperson who represents a client in respect of the acquisition or disposition of a particular interest in real estate shall, (a) take reasonable steps to determine the material facts relating to the acquisition or disposition; (b) disclose the material facts to the client as soon as possible after the determination; and (c) advise the client to consider whether the material facts affect their decision…”
“Material fact” is defined in the same regulation as “a fact that would affect a reasonable person’s decision to acquire or dispose of the interest”.
The verb matters. It is not “disclose what you happen to know”. It is take reasonable steps to determine. That is an obligation to go and find out, and it is owed to clients.
To every interested buyer, where the seller has a disclosure obligation
22.2(1) “If a seller has a legal obligation to disclose a fact to the buyer and the fact is known to the broker or salesperson who represents the seller, the broker or salesperson shall disclose the fact to every buyer who expresses an interest in the real estate.”
22.2(2) requires best efforts to obtain a written acknowledgement from each buyer who receives the disclosure, and to give them a copy of it.
And a rule about the disclosure statement itself
22.3 “If a broker or salesperson who represents a seller knows that the seller has completed a written statement that is intended to provide information to buyers about the real estate… the broker or salesperson shall, (a) disclose the existence of the statement to every buyer who expresses an interest in the real estate; and (b) if requested, make the statement available to a buyer as soon as possible after the request is made.”
That provision is worth knowing about as a buyer, because it is not widely discussed. If a seller has completed a property information statement, the listing agent must tell you it exists and hand it over if you ask. A completed statement cannot be quietly kept in a drawer.
The SPIS: never mandatory, frequently litigated
The Seller Property Information Statement is an optional form on which a seller answers questions about the property. Completing one is never mandatory. Its own preamble says the information “is not a warranty as to the matters recited hereinafter even if attached to an Agreement of Purchase and Sale”, and that “Buyers must still make their own enquiries notwithstanding the information contained on this statement”.
Those disclaimers have not kept it out of court. The Ontario Court of Appeal has held that once a vendor “breaks his silence” by signing one, caveat emptor falls away as a defence, and that even though statements in it are not warranties, they may still found liability as representations.
| If you are selling | If you are buying |
|---|---|
| Completing one is a choice. Once you complete it, the protection of silence is gone and every answer is a representation you can be held to. Answer nothing you are not certain of, and never guess to be helpful | Ask whether one exists — s. 22.3 requires the listing agent to tell you and to provide it on request. Read it as a source of questions, not as a warranty. It does not replace an inspection |
Judicial commentary on the form has been notably unenthusiastic over the years, with judges describing it as fertile ground for litigation. Ontario lawyers are genuinely divided on whether a seller should ever complete one. The trade association’s position has been “when in doubt, disclose” — an ethical standard that sits above the legal floor.
Stigma: no legal duty, and that is the whole answer
A stigma is a non-physical attribute that may produce a psychological or emotional response in a buyer. My regulator gives the examples: a death at the property; a property used in ongoing crime such as drug dealing or a chop shop; previous ownership by a notorious individual; reports of haunting; and a remediated marijuana grow operation.
The decisive sentence, from RECO’s own bulletin: “Stigmas are not explicitly addressed in the legislation.” There is no Ontario statutory duty to disclose a death, a crime, or a former grow operation. Note that a remediated grow op is classified as a stigma rather than a defect — if remediation was not done, or was done badly, you are back in latent defect territory.
Ontario came close to changing this and did not. Bill 18, the Grow Ops Disclosure Act, 2007 would have required owners and agents to disclose a property’s use as a marijuana grow operation, with fines up to $25,000 for individuals and $100,000 for corporations. It received first reading on 12 December 2007 and went no further. It is not law, and no equivalent has been enacted since.
What my regulator requires instead is process. A seller’s representative should have a frank conversation with the seller about potential stigmas, advise the seller to get legal advice, and obtain written instructions on disclosure. A buyer’s representative should establish the buyer’s sensitivities, do additional research where they exist, and consider protective clauses in the offer.
If a stigma matters to you, say so early and put it in the offer. There is no duty to volunteer it, so a question you do not ask is a question nobody has to answer. A clause is worth more than an assumption.
One thing that is not a stigma question: outstanding municipal work orders or property standards orders arising from a former grow operation. Municipalities can impose remediation obligations by by-law, and an order in the public records is a real, searchable encumbrance on the property. Search for it.
If something surfaces after closing
| Route | What it requires |
|---|---|
| Negligent misrepresentation | The route taken in the leading Ontario appellate case, available against a seller and, where the agent failed to verify information, against the agent and brokerage. The Court of Appeal has said a real estate agent’s duty to a client includes a duty to investigate material information about the property, and that an agent should either verify assurances or recommend an independent inspection |
| Fraudulent misrepresentation | Requires dishonesty, and is correspondingly harder and more valuable |
| Concealment of a latent defect | Requires that the defect met the threshold and that the seller knew |
| Active concealment of a patent defect | Removes the caveat emptor defence |
On damages, the Court of Appeal has held that insurance moneys are not deducted from damages payable by the wrongdoer — your own insurer paying does not reduce what the defendant owes.
The clock, and it is shorter than people think
Under the Limitations Act, 2002:
| Section | Rule |
|---|---|
| s. 4 | “a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered” |
| s. 5(1) | A claim is discovered on the earlier of the day the person first knew that the loss had occurred, that it was caused by an act or omission, that the act or omission was that of the person to be sued, and that a proceeding would be an appropriate means to remedy it — and the day a reasonable person in their circumstances ought to have known those things |
| s. 15(2) | The ultimate period: “No proceeding shall be commenced in respect of any claim after the 15th anniversary of the day on which the act or omission on which the claim is based took place” |
Two years runs from discovery, not from closing — and discovery includes the day a reasonable person ought to have known. That cuts both ways. A defect found in year four can still be actionable. A defect you suspected in year one and sat on for three may not be. Ontario courts have dismissed these claims as time-barred. If you think you have one, see a lawyer promptly rather than waiting to see how bad it gets.
Seven things people get wrong
| The belief | The position |
|---|---|
| “The seller has to tell me everything wrong with the house.” | No. Ontario resale runs on caveat emptor. Patent defects need not be disclosed at all. |
| “Any hidden problem is a latent defect.” | The threshold is a defect that would make the property unfit for habitation, dangerous or potentially dangerous, and that is not apparent to someone exercising reasonable care. Merely expensive is not enough. |
| “They painted over it, but it would have been obvious, so I am fine.” | You may be better than fine. Active concealment of an otherwise patent defect removes the caveat emptor defence. |
| “Signing the SPIS protects the seller.” | The Court of Appeal has held that once a vendor breaks his silence by signing one, caveat emptor falls away as a defence, and its statements can found liability as representations even though they are not warranties. |
| “They must tell me if someone died in the house.” | There is no such statutory duty. RECO states that stigmas are not explicitly addressed in the legislation. Ask, and put it in the offer. |
| “A former grow op has to be disclosed.” | A remediated grow operation is classified as a stigma, not a defect, and Bill 18 in 2007 would have required disclosure but never passed first reading. Search for municipal work orders instead. |
| “I have years to sue.” | Two years from discovery under s. 4, where discovery includes when a reasonable person ought to have known, subject to a fifteen-year ultimate period under s. 15(2). |
Worried about what you were not told, or about what you have to say as a seller?
If you are selling, the decision about whether to complete a property information statement is one to take with your lawyer, and I will tell you honestly what I am required to disclose either way. If you are buying and something matters to you — a death, a former grow operation, anything a seller has no duty to volunteer — tell me before we write, so it goes into the offer as a clause instead of an assumption.
connect@jatindua.com · 437-987-1925 · Book a free consultation
Confidential. Read personally and answered within 24 hours. I never share, sell or distribute your information.
Free tool — AI condo value estimator
Condo Valuation
What’s your condo
worth today?
Three quick steps. Condos don’t price like houses — your floor, your view, and whether you own parking move the number more than anything else. This weighs all of them.
Reading recent condo sales…
Estimated market value
—
$0–$0
Most likely $0 · about $0 per square foot
What moved the number
Starting from what comparable units in your area sell for, here’s what your specifics added or subtracted.
Market context
—
—
Two units, same floor plan,
$90,000 apart.
That happens constantly in condos — one has the parking, the right exposure, or a board that keeps the reserve fund healthy. A model can’t see your status certificate. I can.
Frequently asked questions
Does a seller in Ontario have to disclose problems with the house?
Only some. Ontario resale housing operates under caveat emptor. RECO states that a seller does not have to disclose a patent defect — one readily apparent to someone exercising reasonable care — and that it is a case of buyer beware, but adds that a seller should not attempt to conceal a patent defect or buyer beware may not apply. A seller must disclose a latent defect that would make the property unfit for habitation, dangerous or potentially dangerous and that is generally not apparent to someone exercising reasonable care.
What is the difference between a latent and a patent defect?
A patent defect is readily apparent to someone exercising reasonable care in inspecting the property. A latent defect is not readily apparent on such an inspection. The classification matters because it decides whether the seller may stay silent. Importantly, not every latent defect must be disclosed: the regulator’s threshold requires that it would make the property unfit for habitation, dangerous or potentially dangerous. A hidden problem that is merely expensive to fix does not automatically qualify.
What if the seller covered something up?
That changes the analysis considerably. Ontario case law recognises that where there is active concealment of an otherwise patent defect, the general rule of caveat emptor will not apply. So a defect that would have been obvious, deliberately hidden before listing, is not protected by buyer beware. There is also liability for concealing latent defects known to the vendor and for fraudulent misrepresentation about latent defects.
Does a seller have to tell me if someone died in the house?
No. RECO’s bulletin on stigmas states plainly that “stigmas are not explicitly addressed in the legislation”, and lists a death at the property among its examples of stigmas, together with ongoing criminal use, previous ownership by a notorious individual, reports of haunting and a remediated marijuana grow operation. There is no Ontario statutory duty to disclose any of them. If it matters to you, ask before you write and put it in the offer, because a question nobody is asked is a question nobody has to answer.
Does a former grow operation have to be disclosed?
A remediated grow operation is classified by RECO as a stigma rather than a defect, and stigmas are not addressed in the legislation. Ontario came close to changing this: Bill 18, the Grow Ops Disclosure Act, 2007 would have required owners and agents to disclose it, with fines up to $25,000 for individuals and $100,000 for corporations, but it received first reading on 12 December 2007 and went no further. Note the word remediated. If remediation was not done or was done badly, the physical consequences may amount to a latent defect. Separately, municipalities can impose remediation obligations by by-law, so search for outstanding work orders and property standards orders.
Should a seller complete a Seller Property Information Statement?
Completing one is never mandatory, and Ontario lawyers are genuinely divided on it. The form states that the information is not a warranty even if attached to an agreement of purchase and sale, and that buyers must still make their own enquiries. But the Ontario Court of Appeal has held that once a vendor breaks his silence by signing one, caveat emptor falls away as a defence, and that statements in it may found liability as representations even though they are not warranties. Judges have described the form as fertile ground for litigation. This is a decision to take with a lawyer, not with an agent.
What must a real estate agent disclose in Ontario?
Under s. 22.1(1) of O. Reg. 567/05, a registrant representing a client must take reasonable steps to determine the material facts relating to the acquisition or disposition, disclose them to the client as soon as possible, and advise the client to consider whether they affect their decision. A material fact is defined as one that would affect a reasonable person’s decision to acquire or dispose of the interest. Under s. 22.2(1), where a seller has a legal obligation to disclose a fact and the seller’s representative knows it, that representative must disclose it to every buyer who expresses an interest, and make best efforts to obtain a written acknowledgement. Under s. 22.3, where the representative knows the seller has completed a written information statement, they must disclose that it exists and make it available on request.
How long do I have to sue after discovering a defect?
Section 4 of the Limitations Act, 2002 provides that a proceeding shall not be commenced after the second anniversary of the day the claim was discovered. Section 5 defines discovery as the earlier of the day the person first knew of the loss, its cause, who caused it and that a proceeding would be an appropriate remedy, and the day a reasonable person in their circumstances ought to have known those things. Section 15(2) imposes an ultimate limit: no proceeding after the fifteenth anniversary of the act or omission. Because the clock runs from discovery rather than closing, a defect found years later can still be actionable — but a defect you suspected and did nothing about may not be.
Can I sue the agent as well as the seller?
It is possible where the agent failed in their own duty. The Ontario Court of Appeal has held that a real estate agent’s duty to a client includes a duty to investigate material information about the property, and that an agent faced with assurances should either verify them or recommend that the client obtain an independent inspection. That sits alongside the statutory duty in s. 22.1 to take reasonable steps to determine material facts. Whether a claim exists on your facts is a question for a lawyer.
Related reading
- Title insurance in Ontario: what it covers, what it does not
- Title fraud in Ontario: who bears the loss
- What a status certificate actually tells you before you buy a condo
- Condo insurance in Ontario: the standard unit and the deductible chargeback
Sources
Every figure on this page traces to one of these, and each was read on 30 August 2026. Primary sources only — statute, regulation, and the government or agency that administers the rule. Where I could not verify something from a primary source, the page says so instead of guessing.
- O. Reg. 567/05 (General) under the Trust in Real Estate Services Act, 2002 — e-Laws consolidation. Official Ontario consolidation. Sections 22.1, 22.2 and 22.3 and the definition of “material fact” read in full on 30 August 2026. Sections 22.1 to 22.3 were inserted by O. Reg. 357/22 and amended by O. Reg. 235/23. Accessed 30 August 2026.
- RECO Information Bulletin 7.4 — Facts a seller has a legal obligation to disclose (PDF). Real Estate Council of Ontario, effective 1 December 2023. Defines a latent defect as one that would make a property unfit for habitation, dangerous or potentially dangerous and is generally not apparent to someone exercising reasonable care, and states that a seller does not have to disclose a patent defect. Accessed 30 August 2026.
- RECO Information Bulletin 7.5 — Stigmas (PDF). Real Estate Council of Ontario, effective 1 December 2023. States plainly that “stigmas are not explicitly addressed in the legislation”, and lists death at the property, ongoing criminal use, notorious previous owners, reports of haunting and remediated grow operations as examples. Accessed 30 August 2026.
- Limitations Act, 2002, S.O. 2002, c. 24, Sched. B — e-Laws consolidation. Official Ontario consolidation. Sections 4, 5 and 15 read in full on 30 August 2026: a two-year basic period running from discovery, and a fifteen-year ultimate period running from the act or omission. Accessed 30 August 2026.
- Bill 18, Grow Ops Disclosure Act, 2007. Legislative Assembly of Ontario. First reading 12 December 2007. The bill did not proceed beyond first reading and is not law. Accessed 30 August 2026.
About the author — Jatin Dua, Etobicoke real estate agent
I’m the Broker of Record at RE/MAX Quantum Realty, 799 The Queensway in Etobicoke. I write these pages the same way I work a file: read the primary source, quote it, date it, and say plainly where the source is silent or where two sources disagree. If a figure on this page has no citation beside it, that is a mistake and I want to hear about it.
I work with buyers, sellers, renters and investors across Etobicoke, Mimico, Humber Bay Shores, New Toronto, Long Branch, Alderwood and Stonegate–Queensway. connect@jatindua.com or 437-987-1925.