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Professional Standards Manual

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4. General Information

(a) Contract Clauses - View Entire Section

(XXIII) Property Disclosure Statement Clause

Property Disclosure Statement Clause

The attached Property Disclosure Statement dated (date) is incorporated into and forms part of this contract.

If the PDS is not available before the offer is written, then a subject to clause should be inserted in the offer to allow for delivery and approval of the applicable PDS.

Buyer Approving the Property Disclosure Statement Clause

Subject to the Buyer on or before (date) obtaining and approving a Property Disclosure Statement with respect to the information that reasonably may adversely affect the use or value of the property.

This condition is for the sole benefit of the Buyer.

If approved, such statement will be incorporated into and form part of this contract.

NOTE: These documents have been produced by BCREA. The instruction here does not apply to any other generic disclosure statements produced elsewhere.

It is advisable for the licensee to provide, on the contract, a deadline by which the seller will provide the appropriate PDS and a slightly later deadline by which the buyer will approve or reject it.

Licensees will find it helpful to colleagues to leave copies of the disclosure statement available for review when the property is being shown.

(1) Disclosing Defects: How the Law Works

Licensees should be aware of the B.C. Supreme Court decision in Curtin v. Blewett.

The Curtins bought a strata property from the Blewetts. The PDS was incorporated into the Contract of Purchase and Sale.

The sellers answered ‘‘NO’’ to question #25 on the PDS which asked ‘‘Are you aware of any infestation by insects or rodents?’’

The sellers had a previous termite problem in March 1997 which they considered solved after treatment and a 10-year guarantee. There were no further problems up to the time the buyers took possession, and shortly thereafter, the termites appeared again.

The judge held that the sellers were not at fault because the question and others that start ‘‘Are you aware’’ is in the present tense and did not refer to past infestations.

The judge also held that there was no fraudulent misrepresentation on the seller’s part. The representation regarding infestation was not false at the time they made it.

The buyers apparently removed the subject to inspection clause without getting an inspection.

The judge quoted Mr. Justice Boyle in Arsenault v. Pedersen et al. who made the following comments about the PDS:

I have no idea who drafted those questions but they are clearly drawn in a manner offering more protection to a vendor than to a purchaser and in a manner to provide a sales person or vendor with an air of rectitude which might not on all occasions be deserved even given the cautionary line: ‘‘buyers are urged to carefully inspect the property and, if desired, to have the property inspected by an inspection service of their choice’’.

The disclosure statement does not call upon a vendor to warrant a certain state of affairs. It requires the vendor to say no more than he or she is or is not aware of the problem.

Licensees who act for buyers should caution their clients that questions on the PDS worded ‘‘Are you aware…’’ refer only to the present tense. A negative answer does not mean that there has not been a problem in the past or that a past problem will not recur.

Buyers should be advised to obtain an independent inspection, even if a PDS exists and is incorporated into the contract.