In 2001, Sef Gonzales murdered his family in their home. In 2004, that family home was sold to buyers oblivious of its gruesome history.  Once discovered, the buyers refused to proceed to settlement.  After massive bad publicity, the agent, aware of the property’s history from the start, was forced to refund the deposit. The property was eventually sold to a different buyer for a substantially lower price. 

Under legislation, sellers are required to disclose any relevant matters that may affect title.  But that doesn’t cover a property’s history, such as the above.  However, if a buyer feels they have been misled when purchasing a property, such as non-disclosure of ‘material facts’, a court could certainly set aside any contract and award damages to the purchasers.

The current test of a ‘material fact’ is whether disclosure would have prevented the buyer from purchasing the property. 

Non-disclosure of a known issue is at times very tempting. Hiding it often seems like an easy solution. However, this can quickly grow into a problem, often significantly larger than the original issue.

When selling a property, full disclosure of all potential problems prevents the inevitable discovery of the issue, whether major or minor. For instance, the chances of concealing termite damage from a pest inspector are no better than concealing a history of murder.

A seller asking an agent to conceal facts regarding a property is in essence asking the agent to lie.  Yes, agents are employed to act on behalf of the seller, but it is hard to think of a situation where lying on their behalf is in the seller’s or the agent’s interest.

If an agent is prepared to lie to others, it’s not hard to imagine the agent will also lie to the seller. Regardless, if the parties involved in a property sale lie, they are most often found out. 

A simple rule of thumb: If in doubt – disclose. All issues are easier to negotiate if disclosed up front.

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