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4. General Information

(a) Contract Clauses View Entire Section

(xxv) Health and Environmental Concerns

[03/01/2013 The following section was updated with new information]

Buyers and occupiers of real estate are becoming more aware of health, safety, and environmental aspects of property they intend to purchase and/or occupy. Legislation reflects those concerns and mandates ever more stringent levels of safety, greater disclosure and broader responsibilities and liabilities for these matters. Buyers, sellers, and current and former owners are variously included in that responsibility and potential liability.

Asbestos insulation (see Asbestos Awareness is a Licensee’s Responsibility) and urea formaldehyde foam insulation have already attracted interest as possible health risks.  The presence of radon gas (see Radon Gas – A Health and Environmental Concern in some areas of the Province), lead pipes and even lead-based paint has become a greater concern to some buyers. Currently, no B.C. ruling requires the disclosure of the presence of a high-voltage transmission line in a neighbourhood nor of a psychologically impacted residence. However, for personally valid reasons, some consumers may well be motivationally affected by the proximity of a power line or knowledge of a death or other tragedy on a property.

 Aware of these and similar problems, a prudent buyer’s agent will take adequate steps to ensure that the client is fully informed and protected. A seller’s agent, on the other hand, must obey the client’s lawful instructions on whether or not to reveal such information but also must avoid committing fraud or misrepresentation. If there is a sound factual basis for suspecting that information from a seller is incorrect or misleading, the licensee has a duty to verify it.

(1) Contaminated Sites – Site Profile

[03/01/2013 The following section was updated with new information]

Contaminated sites legislation in B.C. requires that a site profile (Schedule 1 of the Contaminated Sites Regulation) must be provided if the owner or the occupier of land is performing any scheduled activities and if the owner is applying for subdivision, zoning, development or variance permits, soil removal, or demolition, or if the property is for sale.

The site profile must be provided to a potential buyer (unless the buyer waives this requirement in writing) of property, which the seller knows or reasonably ought to know was used for industrial or commercial purposes. Such purposes are listed in Schedule 2 of the Regulation. The profile must be given to the potential buyer at least 30 days before the transfer of the property, but if closing is less than 30 days from the date of the Contract of Purchase and Sale, then it must be given before the date of the contract.

The seller is exempted from providing the profile if: (a) an accurate site profile already exists in the Contaminated Sites Registry (access by BC Online at www.bconline.gov.bc.ca); (b) the site has already been determined to be a contaminated site; c) if the property is used mainly for residential purposes; or (d) at the time of the Contract of Purchase and Sale, the property had never been zoned for any other use than primarily residential. The Site Registry is an important source of information for buyers and their agents when conducting their due diligence searches.

Buyers can be put at great financial risk in the case of an unexpected or undisclosed environmental problem because the liability for remediation is absolute, retroactive, joint and several. Licensees are cautioned that the failure to inform sellers that a site profile may be required might be considered professionally negligent.

Licensees must discuss these issues, like others, with their client to ascertain the level of importance of each to the client. If the client wishes the licensee to do so, he or she should include a reference to the issues involved in the Contract of Purchase and Sale as they may be of material concern to the client for health reasons. In this case, the licensee should write subject to clauses covering the confirmation of required information.

The Ministry of Environment has developed a Fact Sheet for real estate licensees, sellers and buyers at this link: www.env.gov.bc.ca/epd/remediation/fact_sheets/pdf/fs11.pdf

Further information about Site Profiles can be found at this link: www.env.gov.bc.ca/epd/remediation/site_profiles/index.htm

(2) Special Knowledge Areas

**Alert**

Licensees should ensure that the public understands the scope of potential issues of concern. Clients and customers should be encouraged to disclose to the licensee particular issues they may wish to incorporate into any contract. Licensees must stress that it will be the client’s responsibility to research those issues to their satisfaction.

Just as there are different specialties within the real estate industry, so there are differences between urban and rural real estate practices, many of which can represent potentially dangerous liabilities for the practitioner who does not acquire local knowledge. A referral to a local professional may be the most responsible step to take on behalf of a buyer or seller.

The following section deals with some of the issues facing licensees in various areas of B.C. There may be additional local issues with which a licensee must be familiar. It is up to the licensee to research the local area, obtain advice, and ensure that the buyers and sellers with whom he or she is working are informed of all pertinent concerns.

The following list suggests a few of the issues which may require investigation. The Professional Standards Manual deals with some of these topics, but the prudent licensee will investigate further:

(3) Special Concerns with Rural Land

Specific rural problems that occur in significant numbers of Errors and Omissions claims include the inadequacy of sewage disposal fields and the quantity and quality of water supply.

See also information on harvesting timber and underground storage tanks.

(i) Sewage Disposal Systems

In BC, many homes outside major urban areas don’t have access to a public sewer system. This means wastewater must be treated on the property, in accordance with the provincial Sewerage System Regulation, using what is known as an “onsite wastewater treatment system.” 

RFC_4_septic1

For licensees representing sellers of properties with onsite wastewater treatment systems, there are a number of details they should be familiar with, in order to provide informed and competent service to their clients.

Licensees may wish to consider the following questions when listing a property with an onsite wastewater treatment system:

Does the Sewage System Regulation (SSR) apply to my client’s property?

The Sewerage System Regulation (SSR), which came into force on May 31, 2005, covers onsite wastewater systems that:

  • process a sewage flow of less than 22,700 litres per day;
  • serve single-family systems or duplexes;
  • serve different buildings on a single parcel of land; and
  • serve one or more parcels on strata lots or on a shared interest of land.

The SSR requires that records of the construction of the onsite system, and of any subsequent alterations to it, be filed with the local health authority. This applies to all properties, including those in remote areas or unorganized territories, whether a building permit is required or not.

What about properties with systems constructed prior to May 31, 2005?

The SSR is not retroactive. However, the seller should be able to prove that the system was in compliance with the regulation in effect at the time the system was constructed. Permits were required for systems built prior to May 31, 2005 and should be available at the local health authority. Please keep in mind that many documents have been lost/destroyed through the years, so the lack of information at the health unit may not necessarily mean that a permit was not taken.

Has the system been planned and installed according to the regulations?

Owners who have constructed a new onsite wastewater treatment system on or after May 31, 2005, or whose systems have been altered or repaired since that date, must have retained the services of an authorized person to plan, install and maintain the system. An authorized person is either a professional engineer or a Registered Onsite Wastewater Practitioner (ROWP). Although systems constructed prior to May 31, 2005 are not subject to this requirement, it is highly recommended that system maintenance be performed by a ROWP.

ROWPS are registered with the Applied Science Technologists & Technicians of British Columbia (ASTTBC), which recognizes four categories of practitioners:

  • Planners, who perform site and soil assessments, design systems, and create maintenance plans for systems,
  • Installers, who install systems according to design plans,
  • Maintenance Providers, who monitor and maintain systems, and
  • Private Inspectors, who inspect and assess existing systems.

Before beginning construction of an onsite wastewater treatment system, the authorized person must file the system’s plans and specifications with the local health authority. Within 30 days of completing the installation of the system, the authorized person must file the following documents with the local health authority, and provide copies of all documents to the owner:

  • a letter of certification;
  • a plan of the system including an As-Built Drawing; and
  • the Operating and Maintenance Manual.

Has the Use Changed?

Where a new use will be made of an existing onsite wastewater treatment system previously permitted under the 1985 Wastewater Treatment Regulation (for example, a house being built to replace a temporary or seasonal dwelling), an authorized person should conduct a site evaluation and a documented inspection of the system to determine if it is suitable for the new use.

If the system requires upgrading, all regulatory filing provisions apply, including plans, specifications and a site evaluation with report.

Has the system been adequately maintained?

All onsite wastewater treatment systems need regular ongoing maintenance. Once an onsite system is installed, upgraded or repaired, it is the homeowner’s responsibility to ensure that the maintenance plan is followed. If the homeowner does not maintain the wastewater treatment system properly, malfunction and possible failure of the system can result, and the homeowner may need to pay for costly repairs or replacement of the disposal system.

The Sewerage System Regulation and the Sewerage System Standard Practice Manual (created by the Ministry of Health) stipulate who may design, install or maintain sewage systems. All work on onsite systems, such as repairs to systems, and any maintenance on systems, must be performed by an authorized person. This includes the regular monitoring and maintenance of septic tanks, treatment plants or processes and dispersal fields (which may be required up to three times per year depending on usage and other conditions that may affect performance).

House with field

Have I obtained all required documentation for the system?

As a licensee acting for the seller of a property with an installed onsite wastewater treatment system, you should obtain the pertinent records from the local health authority in order to verify that:

  • for a wastewater treatment system installed prior to May 2005, the appropriate permit has been issued and the system was installed with the approval and inspection of the appropriate department of the B.C. government; or
  • for any wastewater treatment system installed after May 2005, that it was installed by an authorized person as defined in the Sewerage System Regulation and a Letter of Certification was filed with the local health authority; and
  • records of any major repairs and/or upgrades to the system have been filed with the health authority.

Wastewater treatment systems may be subject to periodic inspections by the local government or the health authority may have issued a work order for a particular system. Licensees should check with the local health authority for the existence of such work orders and inspection reports.

Should the system be inspected?

Inspections of a property’s onsite wastewater treatment system, which are a condition of sale by mortgage or insurance companies, or by prospective buyers, must be performed by an authorized person, either a ROWP registered as a Private Inspector or a professional engineer. ASTTBC recommends that sellers have an inspection prior to listing their property for sale in order to identify any necessary maintenance or repairs. This can simplify the disclosure to buyers and alleviate concerns.

Allow for appropriate time line to book an inspection and to gather all the required paperwork. Accessing the required documents from health authority offices or archives may take several days. Inspections of existing onsite wastewater treatment systems can be challenging and time-consuming, as they may be buried beneath mature landscaping, making the system in some cases difficult to locate and assess, as well as to perform any necessary maintenance and repairs.

Ensure the authorized person receives:

  • all documents from the health authority,
  • land title documents indicating the location of any reserve fields and/or any existing covenants for reserve field easements,
  • records of past maintenance done on the system.

If the system is to be inspected, a clause such as the following should be included in the Contract of Purchase and Sale:

Sewage System Inspection Clause
Subject to the Buyer, at the Buyer’s expense, receiving, reviewing and being satisfied with a report from an appropriate authorized person (as defined in the British Columbia Sewerage System Regulation (‘‘Regulation’’)) concerning the operational function and condition of the components of the wastewater treatment system on the property (‘‘System’’), and compliance of the System with the Regulation on or before (date) .

This condition is for the sole benefit of the Buyer.

What if the inspection reveals problems with the system?

Existing systems that require repairs and/or replacement must be brought into compliance with the Sewerage System Regulation, with limited exceptions. In addition to determining that the system was appropriately installed, a buyer should determine whether any maintenance on the system is in compliance with the Maintenance Plan filed with the health authority.

What disclosure is required?

Sellers must disclose any known problems with a septic system. Typically, a record of pumping (of the septic tank) and a copy of the septic permit (if applicable) is usually sufficient for disclosure purposes. Filing with the health authority is only required if there has been a substantive change to the septic system.

If a Seller has confirmed that an existing wastewater treatment system has been properly installed, inspected and approved, the following clause should be suggested by buyers’ agents for inclusion in an offer:

Seller Sewage System Representation and Warranty Clause
The Seller represents and warrants that:

  1. the wastewater treatment system on the property (‘‘System’’) was installed, inspected and approved by an authorized person as defined in the British Columbia Sewerage System Regulation; and
  2. a permit/letter of certification respecting the System is on file with the local health authority.

If an inspection reveals that the wastewater treatment system for the property does not meet the necessary standards, the contract should provide a clause such as the following:

The Buyer acknowledges and agrees that the onsite wastewater treatment system (“System”) does not meet the approved standards as required and defined in the British Columbia Sewerage System Regulation, and/or that a permit and/or letter of certification respecting the System is not on file with the local health authority. The Buyer acknowledges and agrees that the Seller has not made any representations nor given any express or implied warranties with respect to the System. The Buyer accepts the System, in its present condition, “as is, where is.”

What if there’s no wastewater system on the property?

In the case of a property without sewage services, the contract should provide a clause allowing the buyer to obtain a site assessment by an authorized person for an onsite wastewater treatment system.

Assessing Property for Wastewater Treatment System Clause
Subject to the Buyer, at the Buyer’s expense, having the property assessed (‘‘Assessment’’) by an appropriate authorized person (as defined in the British Columbia Sewerage System Regulation), to determine the feasibility of installing an onsite wastewater treatment system on the property (‘‘System’’), along with the cost associated with the installation of the System, and the Buyer being satisfied with the Assessment on or before (date).

This condition is for the sole benefit of the Buyer.

Our thanks to the Applied Science Technologists and Technicians of BC for their review and feedback on this article.

For Further Information

(ii) Water Supply

In the case of unproven water supply from either an existing or a new source, the buyer will be concerned not only with quality but also with quantity.

When a property is connected to a municipal or community water supply, water is often taken for granted. The rural experience is often quite different — water conservation practices being the rule rather than the exception. When the water supply expected by the buyer disappears, the consequences can be disastrous.

During examinations for discovery in an Alberta case, the plaintiff buyers testified that the water supply was much less than capable of meeting their family’s needs. As a result, a number of extraordinary measures were required. Two members of the family showered in the morning and the other members showered in the evening. They could not do any watering in the yard and they flushed the toilets only when absolutely necessary. That sort of evidence has the potential to generate considerable sympathy at trial.

What should a licensee do when he or she is asked a question with respect to the well? Many buyers do not know the proper questions to ask of the sellers or the buyer’s agent to make an informed decision to purchase a rural property. The water quality and quantity is crucial to a buyer in deciding to purchase a property and a buyer may not be aware of the importance of water quality and quantity.

Licensees have an obligation to avoid error, misrepresentation or concealment of pertinent facts. Therefore, licensees must take reasonable steps to discover the facts pertaining to every property they may list or sell.

When someone says, ‘‘I want the water tested’’, a licensee should be clear what tests the client wants conducted on the water and a condition should be included in the offer to purchase to meet those standards to the buyer’s satisfaction. The test for mortgage approval may be at a lower standard than is satisfactory to the buyer’s personal needs for water quantity and quality. The buyer needs to determine the quality and quantity of water to meet his or her personal needs and then request water tests that will determine if the water meets those standards.

When sellers state that they had enough water quantity for their needs, what does that mean for the buyer? The water needs for each family may be significantly different as a result of the number and age of people living in the house, laundry washed, cattle or horses to water, etc. Does the buyer need the water to be of the quality that babies or individuals with heart conditions can consume?

To minimize potential liability in rural well cases, a listing agent might consider the following practices as a minimum:

  • Secure any representations by the seller concerning the well in writing so as to eliminate any doubt at a later time as to what was said.
  • Does the seller have a well report that verifies his or her information? Have you obtained a copy? Is the well report current? Does it test at the levels necessary to satisfy the buyer’s needs?
  • If a representation based on a well report is to be set out in the listing information, set out the fact that the information comes from a well report and the date of that report. Has the seller experienced any problems with the water supply, on a seasonal or other basis?
  • Are there any restrictions on the use of water by the seller’s household? When acting as agent for a prospective buyer, your duty is to assist the buyer in determining his or her water quality and quantity needs having a regard for all of the inquiries above and also considering the following:
    • If there is no well report or no current well report, recommend as a condition of the sale that the well be tested and approved by the buyer.
    • Determine whether your buyer had any prior experience with wells. If not, ensure that your client understands that the water supply cannot be guaranteed, that a good well can go dry with little or no warning and that even a good well may be subject to seasonal fluctuations.
    • Do not make representations to your client about the sufficiency of the water supply. One family of four people may be able to get by on a two gallon per minute well while another family may need two or three times that amount of water.

Because of the obvious importance of water supply and quality to any rural transaction, prudent licensees will be careful in documenting their files to reflect all of the discussions between them and their client about the water supply and quality.

If necessary, a clause such as the following should be included in the Contract of Purchase and Sale.

Water Quality and Supply Clause

Subject to the Buyer, at the Buyer’s expense, receiving and being satisfied with a report from (name of source of report) concerning the quantity and quality of the water supply on or before (date) .

This condition is for the sole benefit of the Buyer.

Ω If not using the standard form Contract of Purchase and Sale, refer to ‘‘Contracts under Seal

Water Potability Clause

Subject to the Buyer receiving and approving a water potability test report done by (name of service) on or before (date) .

This condition is for the sole benefit of the Buyer.

Ω If not using the standard form Contract of Purchase and Sale, refer to ‘‘Contracts under Seal

In situations where the existing services were not approved or the site cannot be approved for new services, the prudent licensee should protect the parties to the transaction by noting the same in the contract.

Approval Uncertain Clause

The Buyer acknowledges and accepts that the property may not receive approval for an onsite sewage system and that no representations to the contrary have been made by either the Seller or his or her agent.

In some circumstances, where the property is not serviced by municipal water and sewer services, mortgage lenders may require appropriate certificates regarding water potability and the septic system. Also, a well driller’s certificate confirming adequate water flow may be required.

To meet the Canada Mortgage and Housing Corporation’s (CMHC) requirements, water potability must meet the provincial standard, or in the absence of such standard, Health Canada’s Guide on Canadian Drinking Water.

CMHC advises that it will not delay approval of any insured mortgage application pending lender receipt of a potability certificate. The approved lender is responsible for obtaining the required certificates prior to advancing funds. Copies of all certificates must be retained in the approved lender’s file. For further information, contact CMHC at 1-888-463-6454 or visit www.cmhc-schl.gc.ca.

(iii) Water Licences

Trades in real estate involving land where the water supply is not derived from a well or centralized water supply (e.g., municipal or regional district) may involve the existence of a water licence. Licensees who engage in trades of this type of land should advise their clients to check for the existence of water licences. All water licences must be transferred to the new owner, complete with consideration, prepayments or arrears. It is important to note that water licences are not recorded in the Land Title Office. Under the Water Act, a person conveying or disposing of land with a water licence is required to report, in writing, the transfer of ownership of that land to the Water Stewardship Division of the Ministry of Environment, via the local office of the Integrated Land Management Bureau, also known as FrontCounter BC. The Water Stewardship Division can be reached at 1-800-361-8866. The same number can be used to check for the current balance on a water licence account. Further information can be obtained from the Water Licence website at www.env.gov.bc.ca/wsd/.

(4) Asbestos Awareness is a Licensee’s Responsibility

[11/20/2012 The following section was added to the Professional Standards Manual]

WorkSafeBC is working to increase awareness about asbestos health and safety hazards relating to those undertaking repairs, renovations or demolitions in residential properties, whether done by property owners themselves or contractors. WorkSafeBC reports that incidences of asbestos related disease are increasing.

If not handled correctly, workers are in danger of inhaling asbestos-contaminated air and serious chronic health problems can occur. These diseases will not affect you immediately; they often take a long time to develop, but once diagnosed, it is often too late for corrective treatment. For licensees, heightened asbestos awareness is relevant when providing real estate services to buyers, sellers, landlords and strata corporations who are considering acquiring, disposing of, renovating, demolishing or undertaking repairs to a property that may have asbestos containing materials. This need for awareness applies equally to licensees who provide trading, rental or strata property management services. As licensees are regularly reminded, the Council expects licensees to take appropriate steps to alert their clients to the existence of known health or environmental concerns. This would include advising clients to have a property inspected for the presence of asbestos in advance of undertaking any of the activities described above and, further, alerting clients to the consideration of the costs, which may be substantial, associated with the removal of materials that contain asbestos.

Licensees will find a safety, health and environmental inspection/testing/government approval clause below that would be appropriate to be used by licensees representing buyers, who are offering to purchase a property in which there may be materials that may contain asbestos.

This clause is also found in the online version of the Professional Standards Manual.

According to WorkSafeBC information, building materials containing asbestos were commonly used in construction until around 1990. Materials used that may contain asbestos include, but are not limited to, insulation; shingles and felt for roofing; exterior siding; pipe and boiler covering; compounds and cement, such as caulk, putty, roof patching, furnace cement; wallboard; texture coat; acoustical ceiling tiles and plaster; vinyl floor tiles; linoleum; and wiring. Loose-fill vermiculite insulation may also contain traces of asbestos.

Licensees will find many useful online sources about asbestos and asbestos removal, which they and their clients may wish to review, including information provided by WorkSafeBC, Canada Mortgage and Housing Corporation, the Provincial Government, and many municipalities throughout the Province. Here are links to just a few:

(5) Radon Gas – A Health and Environmental Concern in some areas of the Province

[06/19/2012 The following section was added to the Professional Standards Manual]

All Licensees are reminded that they are expected to demonstrate competency and apply reasonable care and skill in their provision of real estate services to their clients, whether those services are trading, rental property management or strata property management services. In order to demonstrate competence a licensee must be knowledgeable about local environmental conditions that may be material to the interests of their clients, be they buyers, sellers, landlords, tenants or strata corporations. While licensees are not expected to be experts in all areas that impact real estate, they are expected to be alert to potential environmental/health concerns in the areas in which they practice and are obliged to advise clients to seek independent professional advice on matters outside of the expertise of the licensee.

An example of an environmental/health concern affecting real estate that has been widely reported is the presence of radon gas in some areas of the Province. The links below are excellent sources of information on radon gas that licensees may wish to review and direct any clients to, who may be impacted by the potential for the presence of radon gas in a property they occupy, are considering selling or buying.

www.healthlinkbc.ca/healthfiles/hfile42.stm
www.cmhc-schl.gc.ca/odpub/pdf/61945.pdf

The Council expects licensees to take appropriate steps to alert their clients to the existence of known health or environmental concerns, in the geographic area(s) in which they provide real estate services. A prudent licensee may wish to research and be able to provide suggestions as to where clients may obtain factual information and independent advice such as the links provided above. In addition to radon gas, this expectation would apply to other environmental/health considerations that impact real estate, including but not limited to, underground oil storage tanks, asbestos, sewage, suitability of site topography and water potability.

(6) Underground or Above Ground Heating Oil Storage Tanks

[05/09/2013 The following section was updated with new information]
[11/17/2011 The following section was updated with new information]

Licensees involved in the listing or sale of a property that contains, or may contain, an underground or above-ground heating oil storage tank (OST) should be aware that the presence of an OST can, because of the potential environmental concern, expose sellers and buyers to significant financial loss and liability. If the presence of an OST is either known or suspected, both buyers and sellers should be advised to seek the advice of an environmental professional as well as legal advice about their obligations and potential liabilities.

Many homes built before 1970 were heated using oil that was stored in an underground or above-ground OST. When homes were later converted to natural gas or electricity, underground tanks were not usually removed from the property; instead, the tanks were commonly left in place, filled with sand and capped. OSTs that remain buried may have rusted and corroded. If oil remained in the tank, leaking of that remaining oil could cause (or may already have caused) contamination of the property and adjacent properties. 

What to do if you are representing a seller 

If a seller is aware of an unused or abandoned OST, the seller has an obligation to disclose this fact in cases where the OST constitutes a material latent defect.  While an unused or abandoned OST may not be necessarily considered a material latent defect under all circumstances, it seems clear, at a minimum, that a court would find an OST to constitute a material latent defect if actual leakage could be shown to have occurred. Of course, any representation about an OST on a disclosure statement made by the seller must be accurate, and a licensee acting for a seller must not be party to a representation that he/she knows to be incorrect.  A seller may need to consult an environmental and legal professional as to whether the tank in question is a material latent defect. 

Where a seller is not aware of an unused or abandoned OST, but the licensee has reason to believe that an unused or abandoned OST may be present on the property, there is at least a possibility that an OST, if found to be present, would be considered to be a material latent defect.  The courts have also held that a licensee acting for a seller has a duty “to check the completeness and accuracy of all information which it is usual and customary for brokers to verify.”  Accordingly, it may be prudent for a licensee to advise the seller-client to take the steps necessary to determine whether in fact an OST is present, so that the later discovery of a tank, either before completion or after the sale of the property, does not leave the seller exposed to significant potential liabilities and expenses. 

What to do if you are representing a buyer

If a licensee representing a buyer has knowledge that a property contains an unused or abandoned OST, the licensee has a duty to make this fact known to the buyer-client and to advise that the presence of the OST can, because of the potential environmental concern, expose the buyer to significant financial loss and liability. If, on the other hand, a licensee acting for a buyer is not aware of an unused or abandoned OST, but suspects (or reasonably ought to suspect) the presence of an OST based on such factors as the age of the property, then section 3-3(1)(h) of the Rules requires the licensee to use reasonable efforts to determine whether an OST is present.  If the licensee’s own efforts do not answer the question, then section 3-3(1)(d) of the Rules requires the licensee to advise the buyer-client to seek any necessary professional advice, such as the advice of an environmental engineer or consultant, and possibly legal advice as well. 

What to do if you are acting as a limited dual agent

A licensee acting as a limited dual agent has a duty to be impartial to the interests of both the seller and the buyer, and must ensure that any advice about the presence or suspected presence of an OST given to one party is also given to the other.  The duty of impartiality means that if an OST is discovered after acceptance of an offer, the licensee cannot provide advice to either party, and should recommend that both the seller and the buyer seek independent legal advice. 

What to do if an OST does exist

Where it has been determined that an OST does exist, licensees and their clients should be aware of BC Fire Code provisions for the decommissioning of an underground OST that require the use of good engineering practices when removing, abandoning in place, or temporarily taking out of service, an underground OST. Additionally, licensees should refer their clients to the BC Ministry of Environment Fact Sheet entitled Residential Heating Oil Storage Tanks, which sets out concise and valuable information and advice. This Fact Sheet, and other useful information and links, can be found at the Ministry of Environment’s website at www.env.gov.bc.ca/epd/remediation/residential-heating/index.htm

Further, licensees must ensure that they or their clients enquire at their local government  (city/municipal/district/regional) office as to any bylaws, restrictions or permit requirements concerning unused or abandoned OSTs, as local governments have differing requirements and provisions for enforcing the removal or abandonment of underground or above-ground OSTs (usually administered by the local fire department). This is particularly important in areas where underground or above-ground storage tank removal enforcement is a priority. 

Lending institutions and insurers should also be consulted as they may also have corporate policy regarding underground or above-ground OSTs. 

When drafting contracts with respect to properties containing underground or above-ground OSTs, licensees should familiarize themselves with the information found in the Safety, Health and Environmental Disclosure Clauses section of the Professional Standards Manual, which can be found online at www.recbc.ca/psm/safety-health-and-environmental-disclosure-clauses/.

(7) Safety, Health and Environmental Disclosure Clauses

NOTE: The clauses in this section may be used for a wide variety of situations involving possible latent defects. Some clauses allow a seller to disclose or warrant and the buyer to acknowledge and accept (or accept the warranty of) the latent defects previously described. They can be used for situations not adequately covered by a Property Disclosure Statement.

Examples include, but are not limited to:

  • potability of water;
  • quantity of water;
  • adequacy of sewage disposal/treatment;
  • suitability of site topography;
  • drainage;
  • soil quality;
  • urea formaldehyde insulation;
  • asbestos;
  • underground oil storage tanks; and
  • contaminated material.

Inspection/Testing/Government Approval Clause

Subject to the Buyer receiving and being satisfied with a site inspection and report from (select inspecting body or expert tester or government authority) concerning (describe condition) on or before (date) .

The Seller will allow access to the property for this purpose on reasonable notice.

This condition is for the sole benefit of the Buyer.

Ω If not using the standard form Contract of Purchase and Sale, refer to ‘‘Contracts under Seal’’.

Possible Safety, Health or Environmental Condition Clause

The Seller discloses, and the Buyer acknowledges, that the (select either building or property) contains (describe condition) and the Buyer accepts the (select either building or property) in this condition.

UFFI and Asbestos Insulation Disclosure Clause

The Seller discloses, and the Buyer acknowledges, that the (select either building or property) (select either contains or has contained) (type of insulation) and the Buyer accepts the (select either building or property) in this condition.

Seller’s Disclosure Where Condition Has Been Tested Clause

The Seller discloses that the (select either building or property) was tested for (describe condition) on (date) by (name of testing contractor or government authority) .

The results of the test indicated that no (describe condition) was present (select either in or on) the (select either building or property) . As evidence of such testing, the Seller attaches the following documents:

(List)

The buyer accepts the condition of the (select either building or property) in reliance on these documents.

Seller’s Disclosure Where Condition Has Been Removed Clause

The Seller discloses that, although (describe condition) was known to have been (select either in or on) the (select either building or property)such (describe condition) to the best of the Seller’s knowledge, was (select either removed or remedied) on (date) . As evidence of the (select either removal or remedy) , the Seller attaches the following documents:

(List)

Seller’s Disclosure but Corrective Measures Taken Clause

The Seller discloses that the (select either building or property) did have (describe condition) but has undergone the following corrective measures:

(List)

The Buyer accepts the condition of the (select either building or property) in reliance on these corrective measures.

Seller’s Disclosure but Condition at Acceptable Level Clause

The Seller discloses that the (select either building or property) was tested for (describe condition) on (date) by (name of testing contractor or government authority) .

The results for such testing indicated that (describe condition) is acceptable and, accordingly, no further action has been taken.

The Buyer accepts the condition of the (select either building or property) in reliance on this testing.

Seller’s Warranty Clause

The Seller warrants that, to the best of the Seller’s knowledge, the (select either building or property) does not have (describe condition) .

Buyer’s Site Profile Clause

Subject to the Buyer reviewing and approving the site profile on or before (date) .

This condition is for the sole benefit of the Buyer.

Ω If not using the standard form Contract of Purchase and Sale, refer to ‘‘Contracts under Seal

Seller’s Site Profile Clause

The Seller, at his or her expense, will provide to the Buyer a completed site profile (Schedule 1 of the B.C. Contaminated Sites Regulation) for the subject property on or before (date) . The Seller warrants that the information contained therein is true and correct to the best of the Seller’s knowledge.

**Alert**

Sellers should be advised that the seller is responsible for all contamination on the property that the seller fails to disclose to a buyer. Sellers should be encouraged to obtain a site profile at the time the property is sold in order to prevent a buyer from later claiming that the property was contaminated.