Seller Tips

Do I Have to Disclose Problems With My House When I Sell in Alberta?

The Direct Answer

Yes, if the problem is a material latent defect and you know about it. In Alberta, sellers are not expected to point out every flaw a buyer can see for themselves, but you cannot hide a major problem that a reasonable inspection would not find. The Alberta Real Estate Association explains the term simply: "material" means major, and "latent" means hidden. If you know about a major hidden defect, it has to be disclosed, and neither you nor your realtor can keep it quiet.

What Counts as a Material Latent Defect

A material latent defect is usually a physical problem that you know about, that a reasonable inspection would not discover, and that can make the home dangerous or unfit to live in. It is not always a physical problem. Examples that need to be disclosed include a basement that floods every spring, a health order, a stop-work order, or a missing development permit for work that was done on the property. When you sign a purchase contract, you are also confirming that you know of no material latent defects other than the ones you have disclosed.

It matters what you do about a known problem. AREA gives an example of a seller who knows a basement floods every spring and then replaces the flooring and drywall before listing, so the damage is hidden. That is treated as fraudulent misrepresentation. Fixing a problem properly is fine. Covering it up is not.

What Does Not Have to Be Disclosed

Two kinds of problems fall outside the mandatory rule. The first is a major problem that is plainly visible, such as an obvious roof problem, because a buyer can see it. The second is a hidden problem that is minor, such as a surface crack in a basement floor that is under carpet. For these, a seller can instruct their realtor not to volunteer the information, though AREA notes that doing so is not always advisable. One firm rule stays in place: a realtor cannot lie about what they know if a buyer asks directly.

How to Protect Yourself

Tell your realtor everything you know about the home, including past water damage, work done without permits, and any notices from the City. Keep receipts, permits and inspection reports for repairs, since they show what was fixed and when. If you are not sure whether something counts, ask before you list, not after the buyer's inspection. It also helps to understand which repairs are actually worth making before you sell, because fixing a known issue properly is often easier than negotiating around it. And because a real estate lawyer completes every Alberta sale, you can raise anything you are unsure about with them, as explained in Do I Need a Lawyer to Sell My House in Alberta? This is general information, not legal advice, and the rules and industry guidance can change, so confirm the current requirements with your realtor or lawyer.

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Jason Beattie

REALTOR® | eXp Realty | BT Group

780-791-9633  |  Jason.Beattie@eXpRealty.com