The Declarations by the seller of the immovable form
A report card on a property
The Real Estate Brokerage Act provides for a range of tools to protect your interests. The Declarations by the seller of the immovable form is one of them.
What’s this form?
Why is it so important?
Selling a property includes various steps and obligations. For the seller, one of them consists in completing with his authorized professional the Declarations by the seller of the immovable (DS) form. Created by the OACIQ to protect the parties concerned, this mandatory form enables the buyer to get detailed information on the condition of the property, and allows the seller to protect himself against potential suits.
This is an opportunity for the seller to disclose in good faith and to the best of his knowledge everything he knows about his property as soon as the brokerage contract is signed.
This form is an integral part of the brokerage contract to which it must be annexed. In turn, the buyer will also annex the DS form to his promise to purchase after signing the acknowledgment of receipt.
When the DS form is mandatory, if the seller refuses to provide the requested information or sign this form, his broker will not be able to represent him in the sale.
The seller’s broker’s duty to verify
Under the Real Estate Brokerage Act, the seller’s broker is particularly required to verify and disclose any factor that may affect either party to the transaction.
The DS form is an excellent tool to help the broker discover factors that may adversely affect the buyer or the seller, in accordance with his duty to verify. This form must not be considered as the only means of fulfilling this obligation. The broker will still have to conduct all other verifications (i.e. consulting the Land Register and previous inspection reports, validating property taxes, analyzing the declaration of co-ownership) in order to always be able to demonstrate the accuracy of the information he provides to other parties.
The seller’s broker must complete each section of the DS form with the collaboration of his client. Where necessary, he will have to make certain verifications to ensure that the written information is always accurate (e.g. flood-prone area, right of ownership restrictions, rental income). This will avoid any declaration that does not reflect reality, which may involve the seller’s or his broker’s liability.
The broker may even suggest to the seller to have a pre-sale inspection conducted to assess, in particular, the exact condition of the property and possible repairs to be carried out.
If he learns that a factor may significantly affect the value given by a buyer to the property, he has a duty to report it. For example: radon, high noise level, unpleasant odour, neighbouring development project, etc.
What should be mentioned in the DS form?
Here are a few examples of things to be declared by the seller, to the best of his knowledge:
Water damage or infiltration
Since it may cause long-term damage, this problem must be declared, even if it was remedied. The seller will then mention the remedial work performed, if applicable, making sure to have all invoices and supporting documents.
It’s the time for the seller to show all the work he performed to maintain the property and all the improvements made. He will indicate the names of contractors and provide supporting documents if possible.
Soil or structural problems
If the immovable moves every spring, it’s his duty to declare it.
Presence of insects or pests
If insects or pests are already in the home, the seller must report this problem and be prepared to prove how he got rid of them.
Servitudes and other right of ownership restrictions
In addition to servitudes, it can be a mortgage, zoning by-law, etc. The correct way for the seller’s broker to verify if there are right of ownership restrictions is to check the Québec Online Land Register or the certificate of location. This information will then be included in the DS form by the broker.
Specific cases relating to the use of the immovable
For details, read the following articles:
Specific cases relating to the history of the immovable
A death on the property; a home which has been used to grow cannabis, even if it has been restored. These are a few examples of factors that do not necessarily affect the appearance, quality or use of the immovable. But since they may impair its value, the broker must mention them and specify the source.
Leasing: leases, rights and relationships
In the case of an income property, the seller must mention all the specifics of leases and rights granted to tenants (e.g. right to access the yard). A non-paying tenant? You must mention it and be ready to send his file to the future buyer.
The seller has not lived in the property, what should he declare?
This is often the case for properties sold by an estate without legal warranty of quality, or when it’s a mandatary who sells. The seller does not have to declare things he is not aware of. However, he still has to complete the DS form, stating why he is unable to answer one of the questions.
And what happens next?
Once completed, signed and submitted to his broker, the seller’s declarations will be annexed to any potential promise to purchase and submitted to the mortgage lender to enable the lender to set the terms of the loan to be extended to the buyer in full possession of the facts. This form will also have to be given to any building inspector upon request.
Oops! The seller forgot a detail...
After completing the DS form, if the seller realizes that he forgot an important detail, or that since the signing of the contract the situation has changed and his declarations no longer correspond to what was mentioned (because of a damage for example), he must tell his broker. The latter will collect the information and will have him complete an Amendments form. This form is also mandatory in this case. Once completed and signed, it will be annexed to the DS form and submitted to any prospective buyer. The broker will indicate in the description sheet of the property that the DS form was amended by an Amendments form.