When selling a house in Ontario, you have legal obligations about what you must tell buyers — and those obligations are more specific than most sellers realize. The general principle of caveat emptor (buyer beware) still applies to obvious, visible conditions that a buyer could discover through reasonable inspection. But sellers are legally required to disclose material latent defects — hidden problems that make the home unsafe, unfit for habitation, or illegal. Failing to disclose when you're legally required to can result in the buyer rescinding the purchase, damages claims, and litigation. Here's what Ontario sellers must disclose, what they don't have to disclose, and how to navigate the grey areas.
What You Are Legally Required to Disclose
Ontario courts and RECO (Real Estate Council of Ontario) regulations distinguish between two types of defects:
Patent defects are visible, discoverable conditions a buyer can observe or that a competent home inspector would find. A cracked driveway, dated kitchen finishes, worn carpets — these are patent. The buyer sees them; caveat emptor applies. You don't have a legal duty to point them out.
Latent defects are hidden conditions not discoverable through a reasonable inspection. When a latent defect is material — meaning it makes the property dangerous to health or safety, structurally unsound, or illegal to use for residential purposes — Ontario law requires you to disclose it proactively, even if the buyer doesn't ask.
The test for whether a defect is material and must be disclosed is practical: would a reasonable buyer want to know this before purchasing? If yes, disclose it.
Common Conditions That Must Be Disclosed
Foundation or structural problems: A crack in the foundation that allows water infiltration, a compromised load-bearing wall, or settlement that affects structural integrity — if you know about it, disclose it. Hiding it behind new drywall or paint does not eliminate your liability. In fact, concealing a known defect compounds the legal exposure.
Water damage or flooding history: If the basement has flooded, the roof has leaked into the interior, or there's been water damage from any source — disclose when it occurred, the cause, and what remediation was done. "It was fixed" is not sufficient on its own — buyers and insurers want the history.
Mould: Known mould, especially if resulting from a structural moisture problem, must be disclosed. This is a health and safety issue. If the mould is visible, it's arguably patent — but if you've covered it or it's in a hidden cavity, it's latent and requires disclosure.
Pest infestations: A known active or past termite infestation, carpenter ant damage, or rodent infestation falls under the disclosure obligation if material. Disclosure includes what treatment was done and when.
Illegal units: If your property contains an illegal basement apartment or secondary suite that doesn't comply with municipal zoning, Ontario Building Code, or fire codes, this must be disclosed. An illegal unit that makes the property non-compliant with occupancy requirements is a material latent defect. See our guide on selling with an illegal basement apartment.
Environmental hazards: If you know of asbestos-containing materials in the home, an underground oil tank, soil contamination, or other environmental hazards, disclose them. These are health and safety issues that clearly meet the material latent defect threshold.
Open or failed permits: If work was done without a required permit, or a permit was pulled but never finalled (open permit), this is a disclosure issue. It affects the legality of the work and can impact the buyer's title insurance and financing. See our guide on outstanding permits.
The "As Is" Clause Does Not Eliminate Disclosure
A common misconception is that selling a property "as is" eliminates disclosure obligations. It does not — not in Ontario. An "as is" clause shifts responsibility for patent defects to the buyer (they accept the property in its current visible condition). It does not waive the seller's obligation to disclose known material latent defects. Selling "as is" while concealing a known material latent defect remains actionable misrepresentation. The clause protects against complaints about visible conditions, not against fraud or concealment.
The Seller Property Information Statement (SPIS)
The OREA Seller Property Information Statement is a voluntary disclosure form asking specific questions about the property — roof, basement, HVAC, pool, environmental issues, and more. Completing it is not mandatory, but if you complete it, every answer must be truthful and complete to the best of your knowledge. Leaving a question blank when you know the answer, or answering falsely, creates additional legal liability beyond the common law disclosure obligation.
Many Ontario sellers, advised by their lawyers, choose not to complete a SPIS — particularly for older homes with complex histories. Not completing a SPIS does not eliminate your disclosure obligation for material latent defects. The SPIS simply provides a structured format for disclosure; the underlying obligation exists regardless of the form.
What You Don't Have to Disclose
Ontario law does not require you to disclose:
- Patent defects (visible conditions the buyer can observe or a reasonable inspector would find)
- The existence of a death on the property (unless it resulted in a physical condition affecting the property — e.g., mould from an undiscovered body that caused structural damage)
- That the property is stigmatized (prior criminal activity, suicide, or a notorious history not resulting in physical defect)
- The sale price you paid, or your motivation for selling
- Competing offers (in a multiple-offer situation, the existence of competing offers must be disclosed by the agent but the specifics — price, terms — are not)
The Practical Approach
When in doubt, disclose. The cost of disclosure is low — at worst, a negotiated price reduction. The cost of non-disclosure, if it results in rescission or a damages claim, is far higher. Ontario courts have awarded significant damages to buyers who proved sellers concealed known defects.
Your real estate lawyer should review your disclosure position before you list. Bring any known issues to their attention — they can help you frame disclosure appropriately, including when professional remediation before listing is a better strategy than disclosing and pricing accordingly.
For a complete understanding of what constitutes a material latent defect in Ontario, read our detailed guide.
FAQ
If I disclose a defect, will it kill my sale?
Not necessarily. Buyers expect older homes to have histories. A disclosed, remediated issue — with documentation of the repair — is far more manageable than a defect discovered during inspection or after closing. Many GTA sales proceed on properties with disclosed histories, with price adjustments that reflect the known condition. The alternative — a buyer discovering undisclosed defects after closing — creates far more damaging legal and financial exposure for you.
What if I genuinely didn't know about a defect?
The disclosure obligation is tied to knowledge — you must disclose what you know. If you were genuinely unaware of a defect (a hidden foundation crack you never saw), you cannot be held liable for non-disclosure of something you didn't know about. However, courts look at what a reasonable owner in your position would have known. If the defect was something an attentive owner would have noticed, the "I didn't know" defence weakens considerably.
Can a buyer sue me after closing for something I didn't disclose?
Yes. In Ontario, buyers can pursue claims for misrepresentation, fraudulent concealment, or breach of contract after closing if they discover a known material latent defect that wasn't disclosed. The limitation period under Ontario's Limitations Act is generally two years from when the buyer discovered (or ought to have discovered) the defect. Consult a real estate litigation lawyer if you receive a post-closing claim.
Does my agent have disclosure obligations too?
Yes. RECO's Code of Ethics requires real estate representatives to disclose material facts they know or ought to know about a property. An agent who knows of a defect and stays silent may face regulatory complaints to RECO or civil liability. You and your agent share disclosure obligations — they are not interchangeable or transferable.
Does the number of years I've owned the home affect disclosure obligations?
No. Disclosure obligations relate to what you currently know, not how long you've owned the property. A seller who purchased a week ago has the same disclosure obligations as one who owned for 30 years. If you inherited or recently purchased and have limited knowledge of the property's history, disclose that limited knowledge honestly — but still disclose anything you do know.