Controversy Around SPIS Form

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By Elli Davis, October 28, 2009

photo by Tim Regan

A recent article from Bob Aaron on yourhome.ca reminded everyone about the long ongoing discussion on the Seller Property Information Statement (SPIS) form among realtors, lawyers and other people related to the resale real estate industry.

SPIS is a document drafted by The Ontario Real Estate Association (OREA) with a simple aim – to protect the seller and lower the chances of possible lawsuits for not revealing the condition of their house or condo. The seller signs the filled in SPIS, where they state the condition of the property in detail. If the new owner later experiences a leaking roof or wet basement etc., the SPIS form can be used as proof of not revealing relevant information.

It is supposed to help real estate agents in their work too, since the anger of buyers often affects not only the seller, but also the agent. Finally, it makes the market more transparent and better equipped with information. Potential buyers can compare several SPIS forms and decide on a more suitable property.

So far it all sounds good in theory, but there wouldn't be any controversy if everything was running smoothly. The main problem is the content of the SPIS form – it is far too complicated.

Buyers are usually unable to fill it in 100% accurately, simply because they don't have sufficient technical knowledge. Would you be able to evaluate in detail the state of electrical or plumbing works in your house? I guess not, unless you are an experienced builder. Seller's mistakes in filling in the SPIS form with the correct information can lead to unavoidable problems in the future, which cause unnecessary tensions between buyers and sellers.

Probably the best for both sides in the real estate business is to use the services of a professional home inspector. Incorrectly filled in SPIS forms can damage the seller, while on the other hand without much detailed information the buyer is left empty-handed. Although an inspection can cost quite a bit of money, selling a house or condominium can be a complex financial process and every possible step should be taken to protect yourself from any future litigation.

Original article