Attic Mould: To Disclose or Not? (Ontario)
Is an attic filled with (in the words of the home inspector) “dormant mould” considered a latent defect?
The mould has to cross a certain threshold before the Seller is obligated to disclose it. So, first they have to know about it, then it has to affect the structural integrity of the building or “render the premises unfit for human habitation” (that’s exactly what the former Chief Justice said, unlike the RECO Bulletin of 2017).
There is the debate as to whether it’s latent or patent. Material (important) latent defects and concealed patent defects must be disclosed. If it’s in the attic, that’s still OK, unless access through the attic door has been blocked. It’s there, it’s present, just because it’s not in the kitchen where most people are walking around, doesn’t mean it’s hidden. A home inspector or a contractor will spot it easily and can provide advice. That shifts the onus to the Buyer to find out.
The Listing Agent is obligated to follow the Seller’s instructions. That’s agency law. There are two principles here, loyal and confidentiality. You don’t get to second guess this, just because you would like to. Oh, yes, you don’t have to take the Listing! That’s what I would recommend. But, many Agents will take the Listing no matter what; and, either disclose or not disclose. The matter is left to “litigation” later.
Morally and ethically, as a Listing Agent I would only feel comfortable if the Buyer made an “informed” decision. But, that’s not the law. The legal standard is much lower. It’s a chess game, and there will be winners and there will be losers!
The Buyer’s Agent has to find out. That’s the job: investigate, determine and verify the material facts. I think we all agree that it’s a material fact (certainly, for the sake of this question). The Buyer’s Agent can ask the Listing Agent. Now, the Buyer’s Agent has to assess the nature and value of the response. The Listing Agent doesn’t have to answer the question, but they just can’t lie. So, how vague and how skillful was the Listing Agent in avoiding a clear response? This assessment goes to the negligence of the Buyer’s Agent in the circumstances.
When the Buyer finally sues, the Buyer’s Agent, the Listing Agent and the Seller are all Defendants. The Buyer’s Agent is usually at the greatest risk. The Seller only gets nailed when there’s clear deception and the Buyer has the onus of proof.
A few points:
1) The Listing Agent should realistically disclose or walk away from the Listing,
2) The Listing Agent should avoid becoming involved in the skillful engagement of "20 questions", seeking to avoid providing the correct information,
3) The Buyer’s Agent needs to be very alert here.
Brian Madigan LL.B., Broker