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Salt Spring Island Real Estate

MLS homes for sale by Scott Simmons

Discover, Decide and Disclose

March 7, 2017 By Scott Simmons Leave a Comment

Caveat Emptor is a Latin phrase that translates to “let the buyer beware”  but the sellers do not get off that easy in BC they still need to disclose Latent defects and the listing REALTOR® has to do pre-listing due diligence and make sure material latent defects are disclosed.

Disclosure standards for the seller and the listing REALTOR®.  Are they different?  Yes, they are because the sellers are obliged under common law and the Realtors are obliged under common law and the Real Estate Council of BC (RECBC) rules under the Real Estate service act.  So, in fact, Realtors are held to a higher standard.   All Realtors are held to section 5-13 (3) If a client instructs a licensee to withhold a disclosure required by subsection (2), the licensee must refuse to provide further trading services to or on behalf of that client in respect to the trade in real estate.   This is very serious and does happen on Salt Spring.  With all the things that there are in rural real estate such as septic fields, DPA, Archaeology sites and wells.   Please note that even if I find out about something with a home on the island, during pre-listing diligence, I can not pass it on to anyone because I’m duty bound to that first client even if I did not list the home.  Unless you the buyer signs a BuyersAgencyExclusiveContract which has section 3-3 of the Real Estate services act that basically supersedes any prior duty’s to a seller that one might have information about.   It sounds like a lot but it’s a simple legal way of making sure I can pass on all info about a home I might know something about.  The rules are there to make sure all are playing the game fair and square.

Here is what the sellers’ disclosure statement will look like with the Disclosure of Latent Defects; As Mike Mangan says below the PDS is a little confusing and does not list all of the Material Latent defects as defined by RECBC.

 

Below is more on the topic from BCREA;

MATERIAL LATENT DEFECT VERSUS LATENT DEFECT. IS THERE A DIFFERENCE?

Mike ManganTwo major disclosure duties govern every listing REALTOR®. Common law requires the Realtor to disclose any known latent defect. At the same time, the Real Estate Council of British Columbia (Council) demands compliance with the Material Latent Defect Rule.1 Are these two requirements the same?

Common Law Latent Defect

Under common law, the onus is on a buyer to satisfy him or herself about the quality of the real property being sold.2 It is the buyer’s job to find any patent defect, being one discoverable by a reasonable inspection or reasonable inquiry. A latent defect is the opposite. The courts effectively define a latent defect as one that is not discoverable by a reasonable inspection or inquiry, and which makes the property dangerous or uninhabitable.3 A seller or listing Realtor must disclose any known latent defect. They may disclose verbally, but written disclosure is the best practice.

A recent Alberta case, McKenzie v. Smith, is a good illustration.4 The sellers’ underground sewer line suffered infiltration by tree roots. The sellers knew there was a history of sewer problems, including a backup, but did not disclose it. These problems could not be discovered by a reasonable inspection. They were underground without telltale signs of previous sewer difficulties. Shortly after completion the sewer backed up again, making the basement uninhabitable for the buyers, who sued the sellers. The court found the sellers liable under common law for failure to disclose this latent defect.

Material Latent Defect Rule

Council’s Material Latent Defect Rule is broad, covering circumstances corresponding to a common law latent defect, plus more. The Rule defines a material latent defect as:

” …[a] material defect that cannot be discerned through a reasonable inspection of the property, including any of the following: 5
(a) a defect that renders the real estate
  (i) dangerous or potentially dangerous to the occupants,
  (ii) unfit for habitation, or
    (iii) unfit for the purpose for which a party is acquiring it, if  
      (A) the party has made this purpose known to the licensee, or  
      (B) the licensee has otherwise become aware of this purpose;  
  (b) a defect that would involve great expense to remedy;  
  (c) a circumstance that affects the real estate in respect of which a local government or other local authority has given a notice to the client or the licensee, indicating that the circumstance must or should be remedied;  
  (d) a lack of appropriate municipal building and other permits respecting the real estate.”  

Unlike the common law, the Rule also demands written disclosure before entering an agreement.

The Council Rule Demands More

Generally, a common law latent defect is a very significant problem, usually involving risk to health or habitability as in the McKenzie case.

Yet, the broad wording of the Material Latent Defect Rule covers a wide range of problems, from the very serious to those without any physical danger at all. For example, in a recent discipline decision a residential property contained two rental suites.6 Neither suite had the necessary municipal permit. The Data Input Form ambiguously said, “Suite: None, Unauthorized Suite”. There was no completed Property Disclosure Statement (PDS). The Council found that both listing Realtors breached the Material Latent Defect Rule by failing to tell the buyer in writing, before entering an agreement, that the suites were unauthorized.

It is easy to confuse the two standards. The terms latent defect and material latent defect are similar. The standard PDS may also confuse some. The PDS defines material latent defect for the seller, but only cites that part of the Council’s definition equivalent to a common law latent defect. The PDS asks if the seller is aware of any material latent defect (the Council’s term), being one that renders the real estate dangerous or potentially dangerous to the occupants, or unfit for habitation (effectively the common law definition).

The two requirements are not the same, but if you always abide by the Material Latent Defect Rule, you will likely meet the demands of both the Council and common law.

Mike Mangan
B.A., LL.B.

1. Real Estate Council of British Columbia (RECBC) Rule 5-13.
2. Cardwell v. Perthen, 2007 BCCA, 313; Fraser-Reid v. Droumtsekas, [1980] 1 S.C.R. 720.
3. McCluskie v. Reynolds, [1999] 65 B.C.L.R. (3d) 191 at para. 53 (S.C.).
4. McKenzie v. Smith, 2016 ABQB 114.
5. Equivalent to the Council’s definition of a common law latent defect.
6. Ladha (Re), 2015 CanLII 89920 (BC REC).
Please note the above is “Copyright British Columbia Real Estate Association. Reprinted with permission.” BCREA makes no guarantees as to the accuracy or completeness of this information or the currency of legal information.

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CRITICAL BUYING INFO

Two things buyers should know before they offer:

Price History

Total time on market

Forms for the new BC Real Estate rules
Disclosure-of-Representation-in-Trading-Services
Agreement-Regarding-Conflict-of-Interest-Between-Clients
Disclosure-of-Risks-to-Unrepresented-Parties
PrivacyNoticeandConsent

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Salt Spring Real Estate Market Report

If you are looking for Salt Spring Island Real Estate it would be well worth your time to check out my Salt Spring Market Report pages.

To help you search for a Salt Spring home for sale I have two systems you can use.  One is a map based mobile search system for tablets and/or phones. This system works really well if you are on Salt Spring, as it will automatically show you properties as you drive around the island.

The other system is a data base (Advanced MLS system or PCS) for laptops or desktops.

These two systems display information in real time, which allows you to view new listings within one second of them coming on the market. You will also find the “sold” prices of homes, as well as other useful information.

Radio Real Estate Shows

TV show Realty Reality on Salt Spring

So glad shooting for the new Real Estate TV show “Realty Reality” is over. It was a lot of work. It all looks so easy on TV but in reality it was not easy. I think they were waiting for the “moment” to happen. You know the big fall down the steps or fall of […]

Home inspection on Salt Spring Island

Home inspection on Salt Spring Island happened yesterday at a 42 year old log home. To accomplish the home inspections the buyer brought in a  Home Inspector, Geo-technical Engineer and a local Salt Spring contractor. Jeff the home inspector tells the story about the bag of Gold he found in an attic; gold story How […]

Salt Spring home face lift

My clients bought this dated salt spring home a month ago and are upgrading it.  The home was built in 1996 and is structurally 100% perfect.  It seams as if the original owner skimped on the finishing.   The main up grade Alex Denny (salt spring master carpenter) will be doing for the owners is re-finishing […]

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Packing correctly can simplify the burden of the entire process for a household and potentially their moving company. By packing smart, using proper protocols, and paying attention to the details, things can be ready to go far before the movers arrive and ready to unload upon arrival. Here are some tips for busy home sellers […]

Salt Spring rental homes by the numbers

I get many people asking me about buying a rental home on Salt Spring and usually spend a lot of time answering all their questions.  So in this post, I hope to cover some of the factual information. Here are the typical questions and basic answers; What is the rental market like on Salt Spring?  […]

Salt Spring Housing Crisis explained

Is Salt Spring in the middle of a housing crisis?  It all depends on who you talk to and what one defines as a crisis. If you move to Salt Spring and have limited funds and are looking to rent a home at about $1000 per month your probably out of luck.  There are basically […]

Buying on Salt Spring Island

Salt Spring rental homes by the numbers

July 18, 2018 By Scott Simmons 2 Comments

I get many people asking me about buying a rental home on Salt Spring and usually spend a lot of time answering all their questions.  So in this post, I hope to cover some of the factual information. Here are the typical questions and basic answers; What is the rental market like on Salt Spring?  […]

Ban on Dual Agency BC

June 16, 2018 By Scott Simmons 2 Comments

On June 15th, 2018 the ban on dual agency just came into effect in BC. Here is a post I wrote about how the new rules will change the way I do business on Salt Spring New Rules for BC Real Estate As a continuation of the New Rules post, what happens if we are […]

New Rules for BC Real Estate

June 16, 2018 By Scott Simmons Leave a Comment

On the 15th of June 2018, the new rules governing BC real estate have come into effect. If you come to Salt Spring to look at homes and or land Scott will go over the form below and ask you if you would like agency representation and ask you to sign this Disclosure-of-Representation-in-Trading-Services as a represented part […]

Salt Spring Island Trust Land Use Zoning bylaw 355

February 17, 2018 By Scott Simmons Leave a Comment

On Salt Spring Island the Island Trust is responsible for our local zoning.  You can find our zoning info here at the Salt Spring Island Trust LUB 355. The bylaw has maps that cover every part of the island.  Believe it or not every few months or so I get an email from someone saying […]

Is an offer an sale?

January 26, 2018 By Scott Simmons Leave a Comment

This last month I had an accepted offer on a home and had a backup offer come in.  The backup offer was a very weak offer because the condition precedent (subject to clause) was so subjective.  It was subject to the buyer viewing and liking the lot.  Normally no one would take an offer like […]

More Posts from this Category

 

SALT SPRING NEWS

Salt Spring Housing Crisis explained

July 12, 2018 By Scott Simmons 2 Comments

Is Salt Spring in the middle of a housing crisis?  It all depends on who you talk to and what one defines as a crisis. If you move to Salt Spring and have limited funds and are looking to rent a home at about $1000 per month your probably out of luck.  There are basically […]

Candidate for Regional Director CREA

March 7, 2017 By Scott Simmons Leave a Comment

I’m running for the position of board member Regional Director for BC for the Canadian Real Estate Association (CREA).  Below is my official platform after edits suggested by CREA lawyers. My name is Scott Simmons. I’m a REALTOR® on Salt Spring Island BC. If you go to the REALTOR.ca site and put in Salt Spring […]

CRD sewer and solid waste

January 23, 2017 By Scott Simmons Leave a Comment

The nuts and bolts of local goverment are really the non glamours basics of water, sewer and garbage (solid waste).   The CRD is the local service provider for Salt Spring.  On the night of 24 Nov 2016 Russ Smith Senior Manager, Environmental Resource Management for the CRD put on a waste presentation.  Here is a […]

Incorporation – A Third Option: Self-governance with contracted services

May 11, 2016 By Scott Simmons Leave a Comment

This was just posted on the Salt Spring exchange in 4 parts.  I have permission from John Gauld the author to publish this document on my Salt Spring web site;   SSI is known as a community that questions conventional practices and is creative and innovative in its response to community challenges. Perhaps the up-coming […]

Salt Spring’s new SSIWPA PAC

November 4, 2014 By Scott Simmons 2 Comments

If you live on Salt Spring you have to get used to all the acronyms.  If you have not heard of SSIWPA it’s because it’s new.   SSIWPA stands for Salt Spring Island WaterShed Protection Authority.  Today  was the first meeting of the SSIWPA PAC (Public Advisory Committee). The ideal behind SSIWPA is that it […]

 

Critical Salt Spring Buying Info

Ban on Dual Agency BC

June 16, 2018 By Scott Simmons 2 Comments

On June 15th, 2018 the ban on dual agency just came into effect in BC. Here is a post I wrote about how the new rules will change the way I do business on Salt Spring New Rules for BC Real Estate As a continuation of the New Rules post, what happens if we are […]

New Rules for BC Real Estate

June 16, 2018 By Scott Simmons Leave a Comment

On the 15th of June 2018, the new rules governing BC real estate have come into effect. If you come to Salt Spring to look at homes and or land Scott will go over the form below and ask you if you would like agency representation and ask you to sign this Disclosure-of-Representation-in-Trading-Services as a represented part […]

Sun Path Chart

Does the home get sunlight?

February 28, 2013 By Scott Simmons 1 Comment

If you’re planning to live on Salt Spring year-round, one of the most important things to consider when buying a property is SUNLIGHT. Do the neighbor’s trees or a mountain block the sun during the winter months?  According to Salt Spring real estate mythology, “If they buy in August, they will list in November and […]

Aggregate Days on the Market

January 2, 2012 By Scott Simmons Leave a Comment

What are “aggregate days on the market”? On the Victoria Real Estate board an agent can “Re-List” a property for a mere $25 fee.  An example would be if a home has been listed on the board for 180 days the listing can be taken off the market and then “Re-Listed” and appear to be […]

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