Defects & Disclosures in Canadian Real Estate 

Legally sellers must not conceal defects or try to mislead buyers about the condition of their property. Sellers must be honest when answering questions about defects within their home. 

If the deficiency within the property is visible to the naked eye and is in relatively plain view then that defect is known as Patent Defect.  

Some examples of a patent defect would be a broken window pane, linoleum that is cut and marked up, holes in the doors, or leaky faucets. A patent defect is a common issue that most buyers look for when they are serious about buying a home.  

However, if the defect in the property is not in plain view and cannot be found by reasonable inspection then the defect is known as Latent Defect.  

Some examples of a latent defect are structural damage, cracked foundation, or excessive water damage behind walls.  Any material latent defects must be disclosed to potential buyers, whether the seller sells the property themselves or through a real estate professional.

A property that is considered stigmatized under Canadian common law is not considered a defect and does not have to be disclosed. A stigmatized home is where any event occurred or notorious person(s) lived that may cause a buyer to be psychologically impacted.

The psychologically traumatizing event doesn’t directly affect the functionality or appearance of the home but may trigger a negative psychological effect on a potential buyer that may prevent them from buying the home if they knew.

Therefore the answer is no, a psychologically stigmatizing event that occurred in a home that is for sale doesn’t have to be disclosed by law in Canada except for Quebec. It is considered Buyer Beware. 

Canadian Realtors practice under common law and there is no legislation that defines or deals with stigmatized homes. 

Although it is morally and ethically appropriate to disclose, most real estate agents do not disclose any psychological stigmatizing event that happened in the property for fear they will not be able to sell it.  

I have found that a psychologically traumatizing event is NOT what causes a home to be deemed “stigmatized”. It is only the emotional response that gets provoked by the buyer. If the buyers in general deem that the event stimulates too much of a negative emotional response then they will not purchase home regardless that the home is in perfectly functioning condition. 

My success in dealing with stigmatized homes has been based on my experience from my near-death experience because I help the buyer understand his negative emotional response and I remove the stigma from the event. 

Stigmas are based on an individual's perception and emotional spiritual belief system so the stigma will vary from each person. The key to success is to understand their spiritual belief system first. 

Based on my experience, I always disclose any issue that happened in the home. The old saying goes, “if the walls could talk...” actually your neighbours do! 

The potential buyer of your home will eventually find out about most things that happen in the neighbourhood so it is best to be upfront immediately. 

Most Google searches on an address will tell you everything you need to know about a home.