Disclosure Obligations

Your son is shot and killed in front of your house. When you sell must this be disclosed?

Recent case law provides the answer to this, and disclosure obligations generally, for agents and sellers with regard to emotional vs physical situations which may have occurred at the property.

Every time I lead a discussion on disclosure it becomes a very emotional exchange with people passionate about their position one way or the other. This month the British Columbia Court of Appeal provided some much-needed clarity on items referred to as stigma and when and how to disclose.

In the case of Wang v. Shao, 2019 BCCA 130, the most sensitive of stigmas being murder was considered. In this fact scenario, the seller’s son-in-law was murdered in a gang-related killing on the sidewalk outside the seller’s house. The publicity related to this killing resulted in the seller’s daughter having to change schools. The seller purchased a house closer to the new school her daughter was attending.

The seller put the property on the market. The seller’s agent was asked why the seller was moving and he conveyed that he was informed it was because the seller’s daughter had changed school. No further questions were asked and no further explanation was given. As part of the evidence provided in the resulting the lawsuit, the seller disclosed that she was also moving for the safety of her children.

The Court of Appeal reviewed all the evidence and the decision of the lower court judge and stated that the rule of caveat emptor applies to the purchasing of property. This means the buyer alone is responsible for checking the quality and suitability of the goods before a purchase is made. But there are exceptions. You cannot misrepresent or tell half-truths.

The rule that exists and is upheld by this decision of “buyer beware” is not intended to permit sellers to deceive buyers rather it places the onus on the buyers to ask specific questions designed to unearth the facts relating to the buyers’ particular subjective likes and dislikes.

The Court decision provides a very clear and thorough review of the reasons for the finding that it is the buyers’ responsibility to ask questions to which a seller must truthfully answer.

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