Factors that may affect a buyer's decision

Every broker has an obligation to inform the parties to the transaction of any factor of which he becomes aware and which may adversely affect the buyers and sellers or the very subject of the transaction.

– CHRONICLE OF PROFESSIONAL PRACTICES – (Update of the article published on January 31, 2012)

However, the importance of a factor depends on each person based on their values, perceptions, religion, age, etc. Some events may be linked to a property without specifically affecting its appearance, quality or functionality, for example an owner suspected of being part of a criminal organization, a death on the property, a property having been vandalized, the presence of an unexplained phenomenon or a house having been used for growing cannabis, even if it has been restored.

Duty to disclose

The obligation of brokers towards buyers is clear on this subject. As soon as a broker becomes aware of a factor that could adversely affect a buyer, regardless of the source of information, he must mention it to the buyer, after having done his due diligence. However, due diligence does not mean investigation. The seller must also be informed by his broker that he has an ethical obligation to disclose the information to any interested buyer, or to the broker who represents him, even before signing a Promise to Purchase .

Example

Let's take an example: the newspapers have published that the co-owners of a building (or the sellers of a building) are part of organized crime. A buyer wants to present a promise to purchase on one of the condominium apartments in this building. You will then have to advise him that, according to the newspaper, certain co-owners are part of organized crime. You will also have to be able to prove what you are saying by having a copy of the newspaper article(s) in question.

How to disclose information

The information you give should be what you received. You should also give the source of this information (the newspaper in the example above). This will allow you to give the information objectively.

When it comes to information that is not related to the quality of the property, but rather to certain people, your verifications and your way of delivering the information to a buyer (with objectivity) are essential elements in order to avoid a claim against you for damage to your reputation. You will also have to remain cautious before providing the names of individuals.

Finally, this type of information will not have to appear on the descriptive sheet. The broker is required to be proactive, that is, not to wait for the buyer to ask questions on this subject. After all, the latter has no reason to assume such a situation, nor to ask questions about it. Also note that even if the information or facts are a few years old, they may still be relevant and must be disclosed.

A good time to get the information is when signing the Brokerage Contract , using the Seller's Declarations on the Property form.

Furthermore, more sensitive information concerning certain people and not the property does not have to be recorded. The broker must transmit this information to the buyer, before he completes a Promise to Purchase , in the form he deems appropriate in the circumstances. However, the broker should always ensure that he keeps proof that the information was transmitted to the buyer, for example in the presence of a witness or an email that you will add to your file.

Conclusion

Although within the meaning of the Civil Code certain factors may not represent a hidden defect affecting the integrity of a building, the broker has ethical obligations under the Real Estate Brokerage Act, in particular with regard to his duty to advise and inform.

Transparency is essential in all circumstances. This practice helps to maintain and strengthen public trust in the profession, by giving it added value. In each situation, you should not forget to use your judgment, because each transaction is unique.

For more information, we invite you to read the following article: Disclosure of a suicide: the Superior Court confirms the usefulness of the seller's declaration.

SOURCE: https://www.oaciq.com/fr/articles/facteurs-pouvant-affecter-decision-achat