Have a look at s. 22.2 (1) under TRESA (Regulation 567/05):
22.2 (1) If a seller has a legal obligation to disclose a fact to the buyer and the fact is known to the broker or salesperson who represents the seller, the broker or salesperson shall disclose the fact to every buyer who expresses an interest in the real estate.
Let’s use a quick example. The Seller unknowingly purchased a renovated former marihuana grow up 11 years ago. There have been no problems.
As you know, this situation could constitute a “defect” or a “stigma”.
If there’s still a problem, it might constitute a latent, material defect which would have to be disclosed.
If not, then the fact that it was a former grow op is just “bad news” and would not have to be disclosed.
The Seller thinks that it’s a stigma, and the agent thinks that it’s a defect.
The Seller doesn’t have to worry about this problem, if they simply remain a FSBO, that is, they can just sell it themselves, no agent at all.
So, no agent, no problem!
Brian Madigan LL.B., Broker