SPIS – as controlled by a “Magician”

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SPIS

Question:

According to the Code of Ethics sales person should disclose the existence of the SPIS to all interested buyers, if he/she knows that one has been completed, unless “otherwise directed by the seller”.

Unless otherwise directed by the seller? What does that mean?

Answer:

The section reads as follows:

Seller property information statement

20. If a broker or salesperson has a seller as a client and knows that the seller has completed a written statement that is intended to provide information to buyers about the real estate that is available for acquisition, the broker or salesperson shall, unless the seller directs otherwise,

(a) disclose the existence of the statement to every buyer who expresses an interest in the real estate; and

(b) on request, make the statement available to a buyer at the earliest practicable opportunity after the request is made. 

At the outset, the Seller and the Listing Agent might identify a potential issue which they think a Buyer might address, like the septic system.

The Listing Agent prepares a SPIS dealing with the septic system.

They might agree:

  1. Produce it to everyone, all the time, no matter what, or
  2. Produce it to specific potential Buyers who are about to submit an Offer.

If #1 is the decision, then the SPIS will likely be lifted onto the MLS system so that it can be downloaded. At the very least, before an Offer is prepared, the Listing Agent will indicate that it’s available and permit the potential Buyer to examine it.

They might also select #2. If they do, then there will be a specific written instruction in the file not to release the document. Once they have a particular Buyer whom they identify to receive the document, the Seller will authorize its release.

So, there may be an SPIS document, the Seller completes it, but doesn’t sign it. This means it’s not a true SPIS. Therefore, it doesn’t qualify under s. 20.

Further, it might be signed, but held in escrow.

The decision about its release is made by the Seller, upon the advice of the Listing Agent.

Other sensitive information might include murders, suicides, acts of violence, remediation of a grow op etc.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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