Sunday, May 22, 2011

Should you sign the SPIS?

Are you for or against the Seller's Property Information Statement?

In its present form I am not happy with it at all. Am I happy with the concept of disclosure?


The trouble is David, that today, the disclosures make experts out of amateurs. In other words, People do not know enough about their homes to answer the questions, that are there. I don't like the questions. Pardon me, Let me rephrase that. I don't like all the questions, and there are a lot of questions omitted.

For instance, Under the law today, A real estate agent has to disclose a material fact. The argument becomes "What is a material Fact?" One thing that is not on the form is.. Was the house ever used for notorious means? Such as... Was it a grow op? Was it a Crack House?
Had there been a murder? How about Suicide? We dont have that addressed properly or are we next door to a Chapter of the Hell's Angels?
I am aware of an instance where there was lawsuit that the agent selling the property "OUGHT TO" have known about the history of the property..

Let me go into a little history about lawsuits. As it stands today, I have testified in between 500 and 600 trials in the Province of Ontario, all in real estate cases. I got my big experience in the 80's doing Urea Formaldehyde cases where people were swearing they did not have UFFI in their houses, and in turn we sometimes found when we digged through the records we find people Appealed their Assessment two years earlier because they did have UFFI. People lied.

As a matter of fact, the first fraud conviction was a case I was involved in with the Police department. From there I got involved in Stigma. A lot of real estate stigma, hidden defects and what have you. A large percentage of them include agency, real estate agents.

The question becomes; Does a real estate agent knock on a door next door to the neighbour and ask Do you know if there was ever a grow op here? Do you know if? Do they go three doors over? Four doors over? Do they canvass the neighbourhood? Where does it stop?
What are the questions that should be on the SPIS?

If I had my choice there would only be three questions with the potential for a fourth.
And 3 to 4 questions are as follows - for sellers.
Question Number One - As a buyer... Is there anything in your home that you are aware of that could negatively impact my buying decision.

Question Two - Almost the same, Is there anything in, on the surface or below the surface of your land of your site, your land that could negatively impact my buying decision and

Question three which is not addressed at all in a SPIS... Is there anything within the neighbourhood either enforce or pending that I should know about that could negatively impact my decision? I want to elaborate on this;

What if they are moving because they found out a released pedophile was taking up residence...
What if they are moving because they found out the airport is
shifting a runway and the increased traffic will be right over their head or they will be putting a recycling plant in so close that [IT] could result in obnoxious odours...

The last question someone else brought to my attention...

Is there anything about your house that would negate getting a mortgage or insurance? I thought those are the only questions to ask.

So to put it very Simply, If a client asked me Should I or should I not sign a Sellers Property Information Statement you would say?


In an odd bit of timing; Serendipity I am told. Bob Aaron posted a link to the last 13 years of SPIS lawsuits including links and context.

1 comment:

Mobile Real Estate Services said...

This is a really valuable article for uneducated home buyers and sellers, as well as real estate agents. Although not signing an SPIS might lead people to feel like "well if I have nothing to hide, why wouldn't I sign it". The problem isn't about if you have something to hide, but your level of knowledge. By not signing an SPIS you are protecting yourself, just like when lawyers advise their clients to not speak to the police. In a time of lawsuits, the best way to protect yourself is to not provide information that could be used against you. Buyers,use your realtor to effectively manage the specific situation you may be in.