Seller disclosure in Ontario: latent vs patent defects

Summary: Ontario real estate runs on "buyer beware," so a seller generally does not have to volunteer a home's flaws. The main exception is a known latent defect that makes the property dangerous or unfit to live in, which must be disclosed. Actively hiding any defect can also expose a seller to a claim.

Sellers often assume they must list everything wrong with the home, and buyers often assume anything they later discover is the seller's fault. Ontario law sits between those two ideas, and the dividing line is whether a defect is hidden, dangerous, and known to the seller.

What does a seller have to disclose in Ontario?

Ontario follows the principle of caveat emptor, or "buyer beware." A seller is generally not required to point out defects a buyer could find through their own inspection. The buyer is expected to investigate the property before closing.

The important exception is a latent defect the seller actually knows about that makes the home dangerous or unfit for people to live in. That must be disclosed. A seller also cannot actively conceal a problem or lie when asked a direct question, even about a defect that would otherwise be the buyer's risk.

Latent vs patent defects: what's the difference?

The duty to disclose turns on whether a defect is patent or latent. A patent defect is visible or discoverable on a reasonable inspection; a latent defect is hidden and would not turn up in an ordinary viewing.

Which latent defects must a seller disclose?

Not every hidden flaw triggers a duty. The defect generally has to be one the seller knows about and that makes the home unsafe or unfit to live in. Common examples that courts have treated as disclosable include:

• Serious structural problems hidden behind finished surfaces.

• Unsafe electrical or wiring issues concealed inside walls.

• Chronic water infiltration or flooding that has been patched over cosmetically.

• A former use that affects safety, such as a property previously used as a marijuana grow-op or drug lab.

• Any defect the seller has deliberately hidden or covered up to prevent discovery.

What is the SPIS, and should you use one?

The Seller Property Information Statement (SPIS) is an optional form on which a seller records what they know about the property's condition. It is not mandatory in Ontario, and sellers frequently choose not to complete one.

The trade-off is real. A completed SPIS can build buyer confidence and create a written record, but any inaccuracy can become the basis for a misrepresentation claim later. Your real estate agent has separate obligations to disclose known material facts under the Trust in Real Estate Services Act, 2002, which is different from your own common-law duty as a seller. Talk to your lawyer before signing an SPIS.

What happens if a seller fails to disclose?

If a seller hides a dangerous latent defect they knew about, the buyer may have a claim after closing. The usual remedies are damages to cover the repair, and in serious cases rescinding the deal, though proving the seller knew is often the hard part.

A buyer generally has two years from the date they discover the problem to bring a claim, under the Limitations Act, 2002. Because these disputes turn on what the seller actually knew and whether the defect was truly hidden, both sellers and buyers benefit from legal advice before things escalate.

Frequently asked questions

Does a seller have to disclose a death or stigma in the home?

Generally no. Stigmas such as a death, alleged paranormal activity, or a nearby unpleasant history are not physical defects, so Ontario's disclosure rules usually do not require them to be volunteered. A seller still cannot lie if asked directly.

Is a home inspection still worth it if the seller must disclose defects?

Yes. Because buyer beware covers patent defects, an inspection is your main protection for anything visible or discoverable. Disclosure only reaches known, hidden, dangerous defects, so an inspection and disclosure work together.

Does completing an SPIS protect the seller?

Not by itself. An SPIS is optional, and an inaccurate one can actually increase risk by giving the buyer a written statement to rely on. Completed honestly and carefully, it can help; completed carelessly, it can create liability.

Can a buyer sue after closing for a hidden defect?

Sometimes. If the defect was latent, dangerous, known to the seller, and not disclosed or was concealed, a buyer may claim damages or rescission. The buyer must prove the seller knew, which is often the central dispute.

Do private (for-sale-by-owner) sellers have the same duty?

Yes. The common-law duty to disclose dangerous known latent defects applies whether or not an agent is involved. Selling privately does not remove a seller's disclosure obligations.

About the author

Joel Fox is a co-founder and COO at Ownright. He helps run the firm's day-to-day work on Ontario residential closings, refinances, and sales, and writes regularly to demystify the parts of a transaction that most homeowners only encounter once or twice in their lives.

At Ownright, we focus entirely on Ontario residential real estate law. We help buyers and sellers with purchase closings, refinances, sales, and status certificate reviews, combining a simple digital platform with a licensed in-house legal team you can reach by chat, email, or video call. If you are selling and unsure what to disclose, you can start your closing online or get in touch with any questions before you list. For the wider process, see our step-by-step guide to selling your home in Ontario.

Legal references: Trust in Real Estate Services Act, 2002, S.O. 2002, c. 30, Sched. C; Limitations Act, 2002, S.O. 2002, c. 24, Sched. B.

Important note: This article is not legal advice. No one should act, or refrain from acting, based solely on the information in this post or any linked materials without first seeking appropriate legal or professional advice.