Under the Covers (of Snow) – Winter Real Estate Transaction Considerations #569

As REALTORS^® know better than anyone, real estate transactions happen 24/7 in all seasons. However, both buyers and sellers have a few additional considerations to keep in mind when a transaction happens in the winter months; therefore, so do their REALTORS^®.

Impact on Property Features and Function

The law still very much recognizes the concept of "caveat emptor," and buyers have a fairly robust obligation to protect their own interests and make whatever investigations about a property they see fit before making an unconditional offer to purchase. That legal doctrine is not impacted by "hot markets" where it is challenging to find the time to do any significant due diligence or where subject conditions are not the norm. In other words, the burden to identify defects does not shift in hot markets to put any greater obligations on sellers or their REALTORS^®.

That said, sellers and their REALTORS^® have a duty to disclose to buyers any issues or defects that they are or should reasonably be aware of.¹ Where knowledge of known defects has been purposely withheld, the doctrine of caveat emptor no longer applies, and the parties who withheld that information may be liable for any resulting damages if a claim is made.²

Wintertime sales may complicate what needs to be disclosed or what can be discovered, given the impact of winter weather. Is snow covering one or more areas of the property, such as a garden, foundation, or roof, that may hide deficiencies? Are there systems such as air conditioning, outdoor pools, water features, or irrigation that do not normally function in the winter? Are certain areas of a property, such as crawlspaces, simply not accessible due to snow, ice, or other winter issues?

Again, a seller and their REALTOR^® do not need to disclose anything other than known issues or issues that should reasonably have been discovered in the circumstances because of a seller's experience with a related problem or red flags that reasonably require investigation. However, buyers should be aware that they, or their building inspector, may not be able to collect as much information about a property in the winter, which may result in a failure to identify defects that will only reveal themselves as the weather warms.

Buyers can mitigate against the impact of wintertime limitations by either trying to include warranties by the seller(s) in the Contract of Purchase and Sale as to the working condition and/or maintenance history of specific systems or adding holdbacks on the purchase price to use for repairs if there are significant or potentially costly concerns. These terms require an agreement by the seller, of course, but may be worth raising with the seller or their REALTOR^® if the circumstances merit. It is unlikely that most buyers will be aware of or consider these mitigation options; therefore, they will be relying on their REALTOR^® to suggest them and advise.

Another way for buyers to potentially discover issues is a careful review of the Property Disclosure Statement with their REALTOR^®. Where a seller has disclosed an issue with the property in question, this will likely require follow up questions to determine the scope and impact of the issue, particularly where further testing or inspection is not possible given weather or market factors. For example, a buyer’s REALTOR^® can ask for more details about when and how the seller discovered the issue, as well as for any repair estimates, scope of repair work the seller has considered, or prior repair details and cost, if available.

It should be noted that features or systems that generally operate seasonally may also create issues when a property that contains a cold weather system or feature is sold in the summer (heat pump, heated driveway systems, temperature monitoring systems). However, given the prospect of a physical cover over the property in the form of snow or ice, weather-hidden issues may be more likely to arise in the winter months.

Impact on Due Diligence

Another issue to consider, on both the buyer's and the seller's sides, when dealing with wintertime sales is the timing and ability to access due diligence information. Contracts of Purchase and Sale often contain subject conditions requiring disclosure of municipal or other property records held by third parties. They may require authorizations be granted to a buyer or to their REALTOR^® to access various records about a property during the buying process. REALTORS^® for both buyers and sellers should take care to ensure that their clients are given enough time to provide and/or access the records at issue. Many municipal and other governmental or quasi-governmental offices shut down or operate on reduced hours over the holiday season. Those potential shutdowns should be discussed with clients and considered when determining the appropriate time limits for the provision and access to property records. Market conditions may require a faster due diligence period than what otherwise may be ideal, but REALTORS^® should assist their clients in weighing potential winter-related delays against them.

No time is a bad time to buy or sell real estate. However, transactions in the winter involve a few additional considerations to ensure that a property keeps its winter wonderland status after the snow melts.

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	1.	REALTORS® acting for buyers also have a duty to disclose any defects with a property that they are aware of to their clients, though this comes up more often in the context of listing REALTORS® since they are normally more familiar with the property and are in direct communication with those who know the property best – the sellers.
	2.	Sahamis v Lenz, 2014 BCSC 2305.

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