Seller Disclosure Statement in Ontario: Home Sellers Guide 2026

Selling a home in Ontario involves more than setting the right price and staging your property beautifully. One of the most important — and often misunderstood — parts of the process is the Seller Disclosure Statement (SDS).

If you’re planning to sell in 2026, this complete guide explains:

• What a Seller Disclosure Statement is

• Whether it’s mandatory in Ontario

• What you must (and should) disclose

• Legal risks of non-disclosure

• How disclosure impacts negotiations

• How to protect yourself as a seller

Let’s break it down clearly and strategically.

What Is a Seller Disclosure Statement in Ontario?

A Seller Disclosure Statement (often called a Property Disclosure Statement or PDS) is a written document where a seller voluntarily shares known information about the condition of their property with potential buyers.

In Ontario, this form is commonly provided through brokerages associated with the Ontario Real Estate Association (OREA).

The purpose of the disclosure statement is to:

• Increase transparency

• Reduce disputes after closing

• Protect both buyer and seller

• Clarify known issues before an offer is made

However, here’s the key point:

In Ontario, a Seller Disclosure Statement is NOT legally mandatory in most residential resale transactions.

But that does not mean sellers are free from legal responsibility.

Is a Seller Disclosure Statement Required in Ontario?

Unlike some provinces, Ontario does not legally require sellers to complete a formal disclosure form in standard resale transactions.

However, under Ontario common law, sellers must disclose latent defects — even if no formal disclosure form is provided.

Patent vs. Latent Defects

Understanding this distinction is critical.

1️ Patent Defects

These are visible or discoverable through inspection.

Examples:

• Cracked tiles

• Peeling paint

• Visible foundation crack

Buyers are expected to discover these during a home inspection.

2️ Latent Defects

These are hidden issues not discoverable by a typical inspection.

Examples:

• Hidden mold inside walls

• Previous flooding not visible

• Structural instability concealed by renovations

• Knob & tube wiring hidden behind drywall

If you know about a latent defect that makes the home unsafe or unfit for habitation, you are legally required to disclose it — even without a formal form.

Failing to do so may result in lawsuits for misrepresentation.

What Should Sellers Disclose in Ontario?

Even though the form is voluntary, smart sellers disclose proactively to reduce legal exposure.

Here are the most important areas to disclose in 2026:

1. Water Damage or Flooding History

• Basement flooding

• Sewer backups

• Insurance claims related to water

Flood history is one of the most litigated disclosure issues in Ontario.

2. Structural Issues

• Foundation cracks

• Load-bearing wall removals

• Settling problems

3. Mold or Environmental Hazards

• Mold remediation

• Asbestos

• Urea formaldehyde foam insulation (UFFI)

4. Renovations Without Permits

If you completed renovations without municipal permits, this must be disclosed.

Unpermitted work can:

• Affect financing

• Delay closing

• Trigger insurance problems

5. Electrical & Plumbing Problems

• Knob & tube wiring

• Aluminum wiring

• Old plumbing systems

6. Roof Issues

• Age of roof

• Known leaks

• Temporary repairs

7. Boundary Disputes or Easements

• Shared driveways

• Encroachments

• Ongoing disputes with neighbors

8. Tenant or Lease Agreements

If the property has tenants, lease terms must be disclosed.

What Happens If You Fail to Disclose?

Failure to disclose a known latent defect can result in:

• Lawsuits for negligent misrepresentation

• Rescission of contract (deal cancellation)

• Financial damages

• Legal costs

• Reputation damage

Ontario courts have repeatedly ruled in favour of buyers when sellers knowingly concealed major defects.

Even if the issue surfaces years later, you could still face liability.

Does Completing a Disclosure Statement Protect Sellers?

Yes — if done correctly.

A properly completed Seller Disclosure Statement can:

• Demonstrate good faith

• Reduce accusations of concealment

• Strengthen your legal defense

• Build buyer trust

• Reduce post-closing disputes

However:

❗ Inaccurate or careless disclosure can increase liability.

Never guess. If unsure, state “Unknown” rather than assuming.

How Seller Disclosure Impacts Negotiation

Many sellers fear that disclosing issues will reduce their sale price.

In reality, strategic disclosure often:

• Prevents deals from collapsing during inspection

• Reduces price renegotiation

• Attracts serious buyers

• Creates smoother closings

Today’s buyers expect transparency. In 2026’s competitive Ontario market, informed buyers prefer clarity over surprises.

A small disclosed issue early is better than a $25,000 price reduction later.

Seller Disclosure vs. Home Inspection: What’s the Difference?

These two are often confused.

Disclosure does NOT replace inspection — and inspection does NOT replace disclosure.

Both work together to reduce risk.

Common Seller Disclosure Mistakes to Avoid

1. “If They Don’t Ask, I Don’t Tell”

Silence does not protect you legally.

2. Hiding Past Repairs

Even if fixed, major issues should be disclosed.

3. Verbal Disclosure Only

Always document disclosures in writing.

4. Guessing or Estimating

Only state facts you know.

5. Not Consulting Your Real Estate Broker

Professional guidance reduces risk significantly.

Are New Construction Homes Different?

For newly built homes in Ontario, warranties may be governed by Tarion.

However, resale transactions are typically governed by common law disclosure principles, not automatic statutory disclosure forms.

If you’re selling a relatively new home, disclosure obligations still apply.

Should You Always Provide a Seller Disclosure Statement in Ontario?

There is no universal rule, but here’s practical guidance:

Consider Providing One If:

• The property is older

• There were major repairs

• The home had past insurance claims

• You want smoother negotiations

• You want to reduce future liability

You May Reconsider If:

• You have very limited knowledge (e.g., estate sale)

• Property is sold “as is”

• Your lawyer advises against it

Always consult both your real estate broker and lawyer before deciding.

How Real Estate Brokers Help With Seller Disclosure

An experienced broker can:

• Guide you through what must be disclosed

• Help complete forms properly

• Strategically present disclosures

• Reduce legal exposure

• Protect your negotiation position

Disclosure is not just legal — it’s strategic.

Handled properly, it strengthens your listing.

Handled poorly, it can destroy your deal.

Frequently Asked Questions (FAQ)

Is a Seller Disclosure Statement mandatory in Ontario?

No, it is generally voluntary. However, sellers must legally disclose known latent defects.

What is considered a latent defect?

A hidden issue that makes the home unsafe or unfit for habitation and is not easily discoverable through inspection.

Can a buyer sue after closing?

Yes, if they can prove the seller knowingly concealed a material defect.

Does selling “as is” remove disclosure obligations?

No. “As is” does not protect against fraud or misrepresentation.

Should I talk to a lawyer before completing a disclosure?

Yes. Especially if there are known structural, environmental, or insurance-related issues.