FAQ – “The seller had renovations done without a required permit and disclosed this on the Property Disclosure Statement (PDS). Is it good enough if I provide the PDS to the buyer?
In this video Steve Jamieson, Managing Broker of RE/MAX Crest Realty Westside, talks about using the PDS for disclosing a material latent defect.
Here’s a brief summary:
Material latent defects must be disclosed
Work done without a permit is a material latent defect, which requires separate written disclosure.
All disclosures must be made in writing before a buyer writes their offer. Timing is critical.
Therefore the PDS can only be utilized for that disclosure only if it is provided prior to the contract being written.
It is strongly advised to include the “Disclosure of Material Latent Defect” clause in the Contract of Purchase and Sale. Refer to your Professional Standards manual and WebForms for details.
Make reference to the material latent defect in the REALTOR® remarks on MLS®
Make sure the PDS is incorporated into the contract.
Disclose of material latent defects is required in rental and lease situations too.
If your seller refuses to disclose a material latent defect, you must refuse to provide trading services to the client.
Please note: The Frequently Asked Question video series is used for training purposes within our group of RE/MAX offices. If you are licensed at a different brokerage, you must refer to your own Managing Broker for advice.