home inspectors

A small beach house in Bayfield, Ont. overlooking Lake Huron has become the focal point of a $2.2 million lawsuit, according to the CBC.

Michael Bousfield and Leah Stumpf, a couple from Guelph, Ont., were in the process of purchasing their dream vacation home when the seller told them three days before closing the deal that the property was uninhabitable due to an eroding shoreline. Having already arranged their financing, the couple was forced to proceed with the purchase and has since launched a lawsuit against the seller, as well as the Ausable Bayfield Conservation Authority (ABCA) and the municipality of Central Huron, after the two governing bodies wouldn’t issue a permit to fix the shoreline without the couple paying for a coastal engineering report.

The case will be heard in a Toronto courthouse.

Negotiating real estate deals can be tricky. As it turns out, sellers aren’t legally required to tell you everything about a property. To avoid any legal troubles, here’s everything you should be aware of when you’re looking at a cottage and whether the sellers are required to declare it.

Patent defects

Roof leaks, foundation cracks, and window breaks. According to the Real Estate Council of Ontario (RECO), a patent defect is any visible issue with a property. They’re easy to spot—this could be a stain on the ceiling from water damage or a missing safety rail. Due to their visibility, the seller is not required to disclose these defects. To ensure you don’t miss any patent defects, RECO advises that you ask the seller and their realtor specific questions about the state of the property, and hire a home inspector to have a thorough look.

Latent defects

These issues are harder to see, so hard that even a home inspector might miss them. They’re the kinds of things that only the seller would know about, such as a basement that floods each spring, a quickly eroding shoreline, or any hidden damage or mould. Sellers are required to disclose this information to buyers. “If a seller is aware of such a defect and doesn’t disclose it, they can be exposed to a lawsuit by the buyer,” RECO says. The latent defect must be disclosed before the buyer enters a contract of purchase. If the buyer discovers a latent defect after purchasing the property that wasn’t disclosed by the seller, they have two years from the day the defect was discovered to launch a lawsuit.

Stigmas

Stigmas don’t affect the property’s appearance or structure. Instead, they’re past events that could cause the buyer to rethink their purchase. For instance: a murder on the property, an illegal grow-op, a notorious individual who lived there, or even rumours about the property being haunted. Since some buyers may be more comfortable with these stigmas than others, the seller is not required to disclose this information unless it affects the price of the property. The onus to uncover any stigmas falls on the buyer and their realtor. RECO recommends asking the seller and their realtor direct questions about the history of the property, researching it online, and speaking to neighbours.

Seller Property Information Statement (SPIS)

When looking at a property, the buyer can request a SPIS from the seller. This is a form filled out by the seller that outlines all of the potential defects and damages they’re aware of on the property. It’s a good way to get an overview of any problems you should be looking for. However, an SPIS is voluntary. A seller is not required to fill one out. RECO emphasizes that real estate transactions operate on a “buyer beware” system. In most cases, it’s up to the buyer and their realtor to uncover a property’s flaws. If a seller is unwilling to provide a SPIS, the buyer should have the home inspected by a professional and ask specific questions about the state of the property before entering a contract of purchase. Sellers are legally required to tell the truth if asked about their property.

Buy, sell, rent, dream

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Do you have any suggestions for alternatives to Wood Energy Technology Transfer inspection of woodstoves for areas where qualified WETT inspectors are very hard to get? What do insurance companies suggest for such regions?—Phil Dean, via email

There certainly aren’t any alternative certifications. “WETT is the only program in Canada,” says Zigi Gadomski, the president of Wood Energy Technicians British Columbia. But, since “it’s not a government certification or mandated by the government, an insurance company can use anyone they want.”

They can. But they probably won’t. “All companies that I know of will now only accept a WETT certification on units such as free-standing woodstoves, pellet stoves, and steel fireplace inserts,” says Bob Dixon of Mason Insurance Brokers in Welland, Ont. “It’s just a fact these days.” The folks at the Insurance Bureau of Canada agree.

But everyone gets the problem when it comes to cottages: “Understandably, the more remote a town or area is, the less likely that there might be WETT inspectors available,” says Dixon. Plus, COVID has messed up woodstove inspections the same way that it has messed up every other part of our lives. “I’ve heard that getting an inspection has been tougher due to backups and restrictions.”

We assume that you’re not willing to remove your woodstove. We also assume that you’d like fire insurance. Unfortunately, even if you wanted to, you probably can’t get a property policy that excludes fire losses caused by a wood-burning unit, says Bev Mitchell of Johnston Meier Insurance Agencies Group in Maple Ridge, B.C. “A regular market carrier is not likely to agree to that as an option. As a special risks underwriter, I see a lot of homes and cottages with woodstoves, and if the information provided on the unit indicates that a WETT inspection is required, we will give the client time to deal with the request,” she says. “In the interim, we will approach it with an extremely high deductible—for example, $100,000—to discourage the use of the unit.” But this interim arrangement only works if the woodstove is “auxiliary use only,” says Mitchell—you need a different, approved main heat source, such as a furnace or baseboard heating.

If it’s strictly remoteness, not inspector availability, that is the issue, consider forking over the cash to bring one to you. (And in case it expands the pool, keep in mind that some home inspectors also have their WETT certification.)

“I was once approached by a client who owned a private fishing lodge in a very remote area,” says Mitchell. “The main source of heat was a woodstove, and as the only alternative would be to self-insure, the client had to fly in a WETT inspector—at some expense.”

It’s not outside the realm of possibility that a company would insure you with no inspection. But is that really what you want? “WETT is the most extensive and correct form of inspection,” says Dixon. “This is not just all about the insurance company requirements. This is about the safety of your family and friends. To me, that is always more important.”

Got a question for Cottage Q&A? Send it to answers@cottagelife.com.

This article was originally published in the May 2022 issue of Cottage Life magazine.