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When it comes to buying and selling property in Winnipeg or Manitoba, people should be aware "caveat emptor" (AKA) "buyer beware" is in play. A fairly broad description of this would be to say that a vendor is not legally obligated to disclose anything about the property that is being sold. The buyer is required to undertake their own investigations of that property to determine if there are any possible issues or problems. This means the law in Manitoba protects a vendor much more than it does a buyer. So, what exactly should a buyer do to protect themselves when signing an offer to purchase? The following are a few essential items every buyer should take into consideration:

PROPERTY DISCLOSURE STATEMENT (PDS)

Along with the standard form of an Offer to Purchase, a separate document exists known as the Property Disclosure Statement (PDS), which will form part of the offer if filled out by the vendor. The PDS is a series of "Yes/No" questions about the condition of the property. If the vendor answers "yes" to any of the questions, they can add further details at the end of the document. Now, don't forget that the law is still "buyer beware," which means a vendor is not obligated to fill out the PDS. However, it is always in a buyer's best interests to have a PDS form part of the Offer to Purchase. A buyer can make the offer conditional on the buyer being satisfied with the PDS. If the buyer reviews the PDS and:

1. is NOT satisfied, the offer can be terminated; or
2. is satisfied, but later learns one of the questions the vendor answered "no" to should have really been answered "yes," or if it turns out the vendor lied on the PDS, a buyer can use this to their advantage. The buyer could bring a claim stating the buyer relied on the vendor's "false misrepresentation" to the buyer's detriment.

PROPERTY INSPECTION

It is also always in a buyer's best interests to hire a property inspector to do a home inspection and make the offer conditional on the inspection being satisfactory to the buyer. A reputable property inspector will determine if there are certain issues/problems with the property in question.

"SUBJECT TO LAWYER'S APPROVAL"

If a buyer is uncertain whether or not the Offer to Purchase they are signing is in their best interests, that buyer can make the Offer "subject to Buyer's Lawyer's approval". This condition would allow the buyer's lawyer to review the offer and advise the buyer as to whether or not the offer is really in the buyer's best interests. If the buyer's lawyer advises it is NOT in their best interest, and the buyer does not wish to make a counter-offer, the offer can be terminated for lack of the lawyer's approval. While the idea of "buyer beware" may seem frightening, it is important to note the following:

1. If a vendor answers any questions that a buyer has about the property, and their statement ends up becoming part of the offer, the vendor cannot outwardly lie. This is committing fraud and is illegal.
2. A vendor IS obligated to disclose any (1) material latent defects (see definition to follow) (2) of which he/she is aware (3) that may render the property either (a) dangerous or (b) unfit for habitation.

Definition of a "latent defect": a defect that would not be discoverable by inspection or ordinary vigilance (inquiry) on the part of a prospective buyer. Does this subject interest you? You may also enjoy reading this blog post.

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Disclaimer - Legalese

This article is presented for informational purposes only. The content does not constitute legal advice or solicitation and does not create a solicitor-client relationship (this means that I am not your lawyer until we both agree that I am). If you are seeking advice on specific matters, please contact Philippe Richer TLR law at 204.925.1900. We cannot consider any unsolicited information sent to the author as solicitor-client privileged (this means confidential).

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