TRESA Trust in Real Estate Safety Act- 2023
1. Sharing contents of offers will be permitted with the seller's written direction:
a) Potential situations in which a seller may want to share the contents of offers with their agent and buyer:
- When the seller wants their agent to negotiate directly with the buyer regarding specific terms or conditions in the offer.
- When there are multiple offers on the property, and the seller wants their agent to compare and analyze the terms in each offer.
- When the seller wants their agent to provide guidance or advice on which offer to accept based on the terms presented.
b) Examples of when this written direction may be necessary:
- If the seller wants their agent to disclose the purchase price and closing date to the buyer, indicating that they are comfortable with this information being shared.
- If the seller wants their agent to discuss specific conditions or contingencies in the offer with the buyer, such as financing or home inspection.
c) Solutions to ensure that the seller's expectations are met while maintaining confidentiality and fairness in the transaction:
- The seller should communicate their preferences and expectations clearly to their agent, ensuring that they expressly provide written direction regarding what information can be shared and with whom.
- The agent should document the seller's written direction and follow it strictly to ensure compliance with the TRESA Real Estate rules.
- The agent should facilitate open communication between the seller and buyer while respecting the seller's privacy and confidentiality concerns.
2. Adjustments to information and disclosure obligations to promote clarity in communication:
a) Information and disclosure obligations adjusted under the new TRESA Real Estate rules:
- The new rules require agents to provide a comprehensive written explanation of all relevant information and documentation related to the transaction to the seller.
- Agents must emphasize the importance of reviewing the information provided and seeking legal or professional advice if necessary.
- The rules also emphasize the agent's obligation to ensure that the seller understands the content and implications of the information and documentation provided.
b) Potential challenges and misunderstandings that may arise from these adjustments:
- Sellers may feel overwhelmed or confused by the amount of information and documentation provided, leading to a lack of clarity and potential misunderstandings.
- Sellers may not fully comprehend the legal and financial implications of certain terms or conditions, leading to misinformed decisions or disputes.
c) Solutions to enhance clarity in communication while ensuring compliance with the rules:
- Agents should explain complex terms or conditions in plain language to ensure the seller's full understanding.
- Agents should encourage sellers to ask questions and seek additional advice if needed, ensuring that they feel fully informed and confident in their decision-making.
- The use of visual aids, such as charts or diagrams, can help simplify complex information and enhance comprehension for the seller.
- As part of the information package, agents should provide a summary or checklist highlighting the key points and important considerations for the seller to focus on.
Mary is a seller who receives multiple offers on her property. She wants her agent to help her choose the best offer based on the terms presented. Mary provides written direction to her agent, allowing them to share the contents of the offers with her and discuss specific terms and conditions with the buyers. In this case, the agent ensures that the offers are kept confidential but can still provide valuable guidance to Mary in making an informed decision.
John is a seller who wants his agent to negotiate with the buyer directly regarding a specific condition in the offer. John provides written direction to his agent, indicating that they are allowed to share this information with the buyer. The agent communicates with the buyer, discussing the condition in question and finding a mutually agreeable solution. This open communication facilitated by the agent helps John achieve his objectives while maintaining confidentiality and fairness in the transaction.
By understanding the potential scenarios, challenges, and solutions related to sharing offer contents and adjusting information and disclosure obligations, sellers can navigate these aspects of the TRESA Real Estate rules with confidence and ensure a smooth and transparent transaction. It is essential for sellers to communicate their preferences clearly, rely on their agent's expertise, and seek additional guidance or advice when needed to make informed decisions.
Examples of Disclosures
The following are examples of the items required to disclose by the seller to their agent and the buyer and their representative.
Under the applicable legislation, TRESA (The Real Estate Services Act), sellers and their agents have an obligation to disclose certain material facts to potential buyers. These disclosures are necessary to ensure transparency and protect buyers from purchasing properties that may be uninhabitable, dangerous, or potentially dangerous. The following is a comprehensive list of material disclosures that sellers and their agents must clearly and concisely declare to potential buyers.
1. Structural Issues: Any known structural issues with the property, such as a cracked foundation, sagging roof, or unstable walls, must be disclosed. These issues can impact the stability and safety of the property and may require significant repair or renovation.
Example: If the property previously experienced foundation problems that were repaired, but the repair may not be long-lasting or effective, the seller and their agent must disclose this information to potential buyers.
2. Water Damage or Leaks: Any past or current water damage, leaks, or moisture issues must be disclosed. These issues can lead to mold growth, weakened structures, and other health hazards.
Example: If the property had a history of water damage due to a plumbing issue or a leaky roof, the seller and their agent must inform potential buyers about the damage and any measures taken to address the issue.
3. Environmental Hazards: Disclosure of any known environmental hazards, such as asbestos, lead-based paint, radon, or contaminated soil, is crucial. Exposure to these hazards can have severe health consequences.
Example: If the property was built before 1978 and may contain lead-based paint, the seller and their agent must inform potential buyers and provide any available records or reports regarding the presence of lead-based paint.
4. Pest Infestations: Any current or past infestations of pests, such as termites, rodents, or bedbugs, must be disclosed. These pests can cause extensive damage to the property and require costly extermination.
Example: If the property had a history of termite infestation, the seller and their agent must disclose the infestation and provide documentation of any past treatments or repairs.
5. Local Area Hazards: Disclosure of any known local area hazards, such as nearby industrial sites, flood zones, or high-crime areas, is necessary. These hazards can affect the quality of life and safety in the neighbourhood.
Example: If the property is located in a flood zone and is prone to flooding, the seller and their agent must inform potential buyers about the flood risk and any flood-related insurance requirements.
6. Property Defects: Disclosure of any known defects in the property, such as faulty electrical wiring, plumbing issues, or HVAC system problems, is required. These defects can lead to safety concerns or the need for costly repairs.
Example: If the property has faulty electrical wiring that poses a fire hazard or outdated plumbing that frequently causes leaks, the seller and their agent must disclose these defects to potential buyers.
7. Neighbourhood Disputes: Disclosing any ongoing disputes or conflicts within the neighbourhood, such as boundary disputes, noisy neighbors, or pending lawsuits, is necessary. These disputes can impact the enjoyment of the property and may lead to legal issues.
Example: If there is an ongoing boundary dispute between neighboring properties or a pending lawsuit related to the use of common facilities, the seller and their agent must disclose this information to potential buyers.
8. Zoning and Land Use Restrictions: Disclosing any restrictions, easements, or zoning regulations that may impact the property's use, expansion, or development is essential. Buyers should be aware of any limitations on their intended use of the property.
Example: If there are restrictions on building additional structures on the property or limitations on commercial use due to zoning regulations, the seller and their agent must disclose these restrictions to potential buyers.
It is important for sellers and their agents to be aware of their legal responsibilities and the potential consequences of failing to disclose material facts to potential buyers. Transparency in these matters not only ensures compliance with the law but also fosters trust and protects all parties involved in a real estate transaction.Posted by Kathy Gordon on