Recently there has been talk of KITEC plumbing and what some of the implications might be to Owners and Home Buyers. KITEC Plumbing is a type of pipe that is vulnerable to premature failure. This can damage the home and result in costly repairs for the homeowner. Realtors are encouraged to find out how to identify KITEC and seek expert assistance from a home inspector or plumber when necessary. Such a flaw can be considered a material fact. Here’s what a home owner or potential Buyer needs to know about material facts. Click on the link to learn more about the issues surrounding KITEC Plumbing
A material fact is something that:
• could affect a “reasonable person’s decision” to purchase or sell a property;
• may influence what price to offer or to list at; or
• may influence what conditions are attached to any agreements of purchase and sale.
One of the governing bodies in The Ontario Real Estate market was recently asked to compile a list of facts that would be considered material. But what is a material fact to one buyer or seller may not factor into another client’s decision-making process for many different reasons, not the least of which is the intended use of the property.
Issues that are often considered to be material facts include:
• The type of insulation and wiring (knob and tube wiring, for example)
• The type of plumbing (Kitec pipes, for example)
• A history of flooding, structural damage or fire
• Renovations made to a property and whether they were conducted with a permit
• Property taxes
• Whether a property had been used as a grow-op or for other illicit purposes
• Any rights-of-way, allowances or restrictions regarding use of the property established by the municipality, region or other governmental agency
• Existence of nearby businesses or facilities that may impact quality of life (e.g., prisons, quarries, industrial facilities, airports, rail lines, etc.)
A Realtor has certain obligations to his or her clients and in the scenarios highlighted above those obligations are twofold:
1. Take reasonable steps to determine the material facts; and
2. Promptly disclose those facts to the client.
When a realtor is working with a Seller:
When acting as a listing representative it is possible that the material facts may already be known by the seller, but the obligation to determine and disclose to your client still exists.
For virtually all material facts, the “reasonable steps” required for determining those facts will go beyond simply accepting the seller’s verbal representations. Some research and supporting documentation will be necessary.
When a Realtor is working with a buyer:
When working with a buyer, Realtors often have checklists or ask questions of the buyer to determine their needs and what type of property will best suit them. This is the ideal time to discover the interests and sensitivities of the buyer and help determine what the buyer would consider a material fact about a specific property.
This Discussion simply reinforces the need to be WORKING with a specific realtor you trust and one that you have developed a good working relationship with. By WORKING with, I mean under contract with as the realtors duties are to ensure his or her clients make well informed decisions and not just “Make A Sale”. If you are selling your home that contract comes with the listings agreement, however, as a buyer it is a document called a Buyers Representation Agreement