Brian Madigan’s “Material Facts” CHECKLIST (Use and Disclaimer)

I have taken steps to develop a “material facts checklist” for real estate agents to assist them in the listing process.

First, it’s not comprehensive. Second, it’s a work in progress.

So, that means USE it at YOUR OWN RISK!

This document is not intended to be a Seller Property Information Statement (SPIS). It should not be signed by the seller. The seller should not initial the document. The seller should not be signing any companion documents to the effect that the checklist is true and accurate. The seller should not say that the information is true “to the best of their knowledge, information and belief”. Further, the seller should not be stating that they will indemnify the agent from liability, nor authorize the document itself to be placed on a listing as a schedule or delivered to prospective buyers or their agents.

You might remember that all of those matters were covered in the SPIS. That document came under severe criticism because it placed sellers at risk. It asked questions which were vague and uncertain. Others were prolix and confusing. It called for professional opinions in some cases.

Let’s be candid. That was somewhat unfair. It placed all the blame on the sellers and exempted the agent. After all, the seller in most cases is an ordinary consumer and the real estate agent is a professional governed under the Real Estate and Business Brokers Act, 2002.

This document is intended to be a CHECKLIST, and a checklist only. It’s simply a reminder to the agent to ask certain questions and make a note of them.

The agent is under a statutory duty imposed in the Code of Ethics passed pursuant to REBBA, 2002 to:

  1. Determine,
  2. Investgate, and
  3. Verify,


A material fact is a defined term. It is a fact which would affect a reasonable person’s decision to buy or sell property.

The seller himself is under a duty at common law to disclose material, known latent defects which render the premises either structurally unsound or unfit for human habitation. In addition, there is a duty to disclose patent defects if they have been concealed or hidden from view.

That’s not the agent’s duty here. This is directed to material facts, which happen to go well beyond the seller’s duties and obligations at law.

So, while the seller in respect to many matters has the right to remain silent, that usually doesn’t yield the best price for the property. The seller wants to maximize the value. That means listing the property on an MLS system and speaking up when it comes to issues concerning the property. Hidden or concealed defects are just going to come back in the form of a lawsuit.

So, in the interests of marketing, and negotiating the highest price, let’s have “full disclosure”. That means that any defects are disclosed, known and accepted by the buyer. They are factored into the price, so there will be no lawsuits in the future, since there were no surprises.

The Checklist contains several sections. These are questions that can be posed to a seller. Most of the answers would be known. The agent should make careful notes to ensure that the responses are recorded.

In some cases, the response will be a “yes” or a “no”, followed by some factual piece of information which can be noted. In other cases, the seller will not know the facts, or the question may not be applicable, in which case “unknown” or “n/a” would be the correct notation.

The seller’s response is not the end of the matter. If the fact is a “material fact”, the agent must pursue it. The fact must be determined, investigated and verified. So, get a copy of the tax bill. It’s not sufficient for the seller simply to say that he thinks that the taxes are all paid up. Get a copy of the bill. You will need the source document. Make a note as to who is going to do that, and when the follow up should take place. This is the same procedure for all of the issues.

If something constitutes a material fact, then pursue it. Add another question. This checklist is neither comprehensive nor complete. So, just because the question is not noted, doesn’t mean it’s not a material fact. It may be. And, you’re the professional, so it’s your job to ASK the question and FIND OUT the answer. Make a note of the source document. Copy it and place it in your file for subsequent retrieval in the event of a issue.

The Checklist is a personal and confidential document. It comprises the notes made by the agent. One of the fiduciary obligations owed by the agent to the principal is confidentiality. So, this is not a document to be posted or distributed, nor is it a document to attempt later to blame the seller and protect the agent. This document is a “working document”. In effect it is a document which is simply a “to do” list, so that the agent can do a proper job. Part of that job is to protect the seller from liability. Unfortunately, that really didn’t seem to be the purpose of the SPIS.

Brian Madigan LL.B., Broker

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