What is a SPIS (Seller Property Information Statement)?




The SPIS will provide information related to defects, renovations and other pertinent property information, based on the seller’s knowledge and experience.The Code of Ethics, a regulation under the Real Estate and Business Brokers Act, 2002, contains specific provisions related to the Seller Property Information Statement (SPIS). However, it does not oblige a seller to complete one.

If a broker or salesperson has a seller as client and knows that the seller has completed the SPIS, the broker or salesperson is required to disclose its existence to every buyer interested in the property. They are also required to make the SPIS available to any interested buyer upon request, unless the seller has directed them not to.

Brokers and salespersons are also required to disclose material facts. This means they have an obligation to disclose any fact they are aware of that, with respect to the real estate transaction, that might reasonably affect a person’s decision to buy or sell a property.

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Why are home inspections necessary?


When you purchase a home, it’s often recommended that you have a home inspection done. In fact, a typical Agreement to Purchase Form will include a standard preprinted clause with respect to home inspections. This is one of the most common conditions in an offer to purchase a property. When real estate markets are extremely active and you really want a particular home, skipping the home inspection and not placing this kind of condition in an offer can be tempting. Before you make the decision, consider the benefits of a home inspection.

If there is a Seller Property Information Statement (SPIS), you may receive a copy and have a general sense of comfort about the history of the property. However, you should keep in mind that the person selling the home may not be aware of property defects and that the information provided in the SPIS is based only on their personal knowledge.

Similarly, the broker or salesperson representing you in the transaction may have the experience to identify visually obvious defects, but underlying problems can exist.

A qualified and experienced home inspector will examine the major systems in the home such as:

  • Electrical

  • Roofing

  • Plumbing

  • Heating/Air Conditioning

  • Foundation

  • Septic Systems

Many home inspection companies encourage you to attend the inspection and ask the inspector questions during the process and about the results of the inspection. The decision is yours to make, but you will be better informed and able to assess whether or not you want to invest in any upgrades or repairs that might be needed.

<Click Here> to download RECCO’s Consumer Publication on this topic

 

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Can you sell real estate if you are not registered?


In Ontario, in order to trade in real estate, brokers and salespersons must be registered under the Real Estate and Business Brokers Act, 2002. Before you begin working with a real estate broker or salesperson, make sure you confirm that they are registered by using the online search feature.

The information available to you includes the registration status, the current expiry date of registration and regulatory activities related to the brokerage, broker or salesperson, such as:

  • Registrar’s Proposals to refuse, revoke, suspend or apply conditions to a registration

  • Charges under REBBA 2002 and related convictions

  • Immediate suspensions ordered by the Registrar

  • Decisions of Discipline and Appeals Panels related to ethical conduct

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What are the benefits of working with a registered salesperson?


Education, Knowledge and Experience

All brokers and salespersons are required to complete educational courses prior to becoming registered and are also required to take continuing education courses. In addition, many brokers and salespersons pursue ongoing professional development opportunities, obtain membership in professional associations and attend industry events on a regular basis. While consumers buy and sell real estate infrequently, most brokers and salespersons are engaged in these activities on a daily basis.

Consumer Deposit Insurance

All brokers and salespersons are required to be insured. The insurance program administered by RECO includes consumer deposit insurance – paid for by brokers and salespersons. In the event of fraud, misappropriation of funds or insolvency there is coverage available to consumers of up to $100,000 per claim to a maximum of $500,000 per occurrence. If the deposit is being held by your lawyer, you should contact the Law Society of Upper Canada to determine what insurance protection may be available.

Complaints & Enforcement

All real estate brokers and salespersons are required to comply with the Real Estate and Business Brokers Act, 2002 and associated regulations, including the Code of Ethics. RECO addresses inquiries, concerns and complaints about the conduct of brokers and salespersons and takes appropriate action to protect the public interest.

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Can commissions be an agreed upon amount?


UPDATE: Previously, real estate brokerages could charge consumers a flat fee or a percentage of the sale price, but not a combination of the two. The restriction has been removed, so brokerages now have the option to make fee arrangements that could include a blend of a flat fee and a percentage of the sale price.

These changes, brought in by the Stronger Protection for Ontario Consumers Act, 2013, are effective as of
December 12, 2013.

Click here to see PUBLIC ADVISORY notice of December 13, 2013


 

Commission, or other remuneration, must be either:

  • An agreed amount or,

  • A percentage of the sale price

Commission or other remuneration cannot be a combination of an agreed amount and percentage.

Read moreCan commissions be an agreed upon amount?

Are Commissions Negotiable?


Commissions are not fixed nor approved by the Real Estate Council of Ontario, government authorities, real estate associations or real estate boards. It is the brokerage that determines the commission rate it wishes to charge a consumer.

Typically, the commission will be based on the services provided by the brokerage and its employees. Keep in mind that the cheapest deal, as with most things, is not necessarily the best deal. Make sure you understand the details of any agreement before you sign.

While you may be working directly with a broker or salesperson, commissions are payable to the brokerage. If you are asked by an individual to make a direct payment, contact the brokerage immediately.

<Click Here> to download RECCO’s Consumer Publication on this topic

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