Buying a property is a little like getting married. It is essential that one really knows “the house” before signing the contract!
Before deciding to spend the rest of your life with your spouse, you no doubt tried to find out about their past to get to know them better. When it comes to real estate, you won’t have to investigate very long: the property’s entire history is written down in the Declarations by the Seller.
What It Contains?
The form contains dozens of questions regarding various topics. Of course, it notes practical information, such as easements or renovations, but also any issues (resolved or not) related to the building. For example, has the property ever been infested by insects? Will it require major renovations soon? Has there ever been any water damage? Are there any ongoing legal proceedings with respect to property? Does it meet environmental standards or are there cracks in the foundation? In short, everything the buyer needs to know to make an informed choice. It is therefore not surprising that this valuable document has been mandatory since July 2012.
The Declarations by the Seller, like other documents relating to the sale of a home, must be given to the mortgage lender and to the building inspector, if they request it.
Each and Every Person’s Responsibility
To perform their duties legally, brokers must have their client fill out the Declarations by the Seller before a transaction can take place. Under the law, a real estate agent selling a house without having this form signed may be subject to severe penalties.
In fact, the person selling their home usually completes this declaration jointly with their broker. The latter’s presence is very important: they answer any questions as well as give the seller advice. Indeed, the questions the form contains can sometimes be confusing for real estate neophytes.
For their part, the seller is required to answer the questions to the best of their knowledge and to provide documents relating to their declarations, if necessary, such as invoices from professionals.
Buyer, Seller, Broker… Everyone Wins
The organization responsible for the creation of the Declarations by the Seller (the OACIQ) was mandated to inform and protect the public in relation to the field of real estate and mortgage brokerage. It makes sure that there are as few loopholes as possible when it comes to brokers’ activities. In fact, both the seller, the buyer or the real estate agent benefit from its implementation:
Buyer: The advantage for the buyer is obvious: they know exactly what to expect when buying the property. Plus, the information contained in the declaration can become a bargaining weapon to lower the price.
Seller: For the seller, the document can be very useful as it can help them avoid having to deal with disputes with the new owners. The more transparent the seller is when filling it out, the less likely they are to end up in hot water. Furthermore, when completed prior to putting the home on the market, this document will help the seller determine the home’s true value.
Broker: The Declarations by the Seller helps them properly evaluate the property they have been mandated to sell, and thus better guide their clients when listing the house. Or, when hired by a buyer, to give them an accurate picture of potential properties.
As you can see, the Declarations by the Seller can only be to your advantage; however, be aware that it should not be considered an alternative to a building inspection. Before you say “Yes, I do” to your dream house, it’s better to have it inspected.