Description: There are many ways that a lawsuit can occur in the world of real estate. One of the most common reasons for a lawsuit is disclosures. Find out exactly what a real estate disclosure is, examples of them and how to avoid getting caught up in a disclosure-related lawsuit.

Keywords: Real estate disclosures, real estate litigation, real estate, disclosure statements.


The article has been kindly provided by our client Real Estate Bay Realty

Real Estate Disclosure Related Lawsuits

It doesn’t matter if you’re a buyer or seller; disclosures are an integral part of any real estate transaction. Generally, a fresh coat of paint will be given to a home by the sellers to show the property at its best. This is common and happens 9 out of 10 times, but occasionally, that paint could be there to hide something. In most cases, it’s the sellers’ and agents’ responsibility to disclose any known defects – past or present – to prospective buyers. Sadly, some people don’t like to play by the rules and hope to get something past the buyer.


Real estate disclosure statements, which exist in a variety of different forms, are the buyer’s chance to know as much as they can about the property itself, and the seller’s experience while living in it. Potential seller disclosures can range from knowledge of drafty windows to any work that has been done without a permit, to information about a major construction or new development project happening nearby. It is the duty of the seller to also disclose any latent defects with the property to any potential buyers. A latent defect is a defect that cannot be detected by any reasonable means, and it is not usually discovered by a standard home inspection.

Disclosure documents don’t just serve to inform buyers. They can also protect the sellers from any future legal action. It’s the seller’s chance to divulge anything that can negatively affect the value, usefulness or satisfaction of the property.


Here are more examples of common real estate disclosures:

  • The disclosure of any lead-based paint in the home
  • If there is any asbestos
  • Environmental hazards
  • Natural hazards
  • Boundary line disputes
  • Structural and mechanical issues
  • “Haunted” or otherwise stigmatized property
  • Miscellaneous disclosures


In some areas, the seller may not just be required to disclose known defects, but they could also be legally responsible for discovering any defects before selling that a buyer could confront after a purchase. This means that the unfamiliarity of defects does not automatically remove liability from the seller when they could have reasonably identified them. For this reason, it is a good idea to be diligent in identifying potential issues before listing a property for sale.


Lawsuits for failure to disclose property defects are a pretty standard form of real estate litigation. Both buyers and sellers need to take the time to learn about the law before entering into any real estate contract. If a buyer discovers problems after the purchase that should have been disclosed by the seller, they may pursue a legal action with a real estate litigation lawyer. There are, however, multiple considerations to take into account if you decide to go ahead with a lawsuit for property defects.

These types of lawsuits are generally aimed towards covering the cost of any repairs or replacements related to the specific defect. Additional damages caused by the specific situation or defect may also be included in a claim as well. A buyer can insist that they are not responsible for repairs of pre-existing issues if they were not made aware of them before closing.


Before rushing into a lawsuit, a buyer needs to consider a few things first, including:

  • A buyer cannot sue for new defects that occur after the sale
  • The buyer can’t sue for any defects that they were made aware of before the closing

Whether you’re buying or selling a home, it’s important to be honest and do your due diligence to protect yourself from future legal action. In order to avoid any potential obstacles after your real estate purchase, it is highly recommended to use services of a professional real estate agent and real estate lawyer lawyer which will help you to determine what are and how of any potential defects (if any) should be properly disclosed. Typically, an agreement of purchase and sale will include conditions such as a home inspection, and sometimes a request for the seller to complete the Seller Property Information Sheet (SPIS). Unfortunately for Ontario’s buyers, sellers are not obligated to provide the SPIS or allow you to conduct a home inspection, so it could serve as a red flag to a buyer not to proceed with an offer.

If you are facing a lawsuit stemming from a property sale, make sure to contact an experienced real estate litigation lawyer at Z Legal to get the legal representation you deserve.