Selling a home with defects or unpermitted work — what you must disclose
Ontario is a buyer-beware province, with one large exception that decides most disputes. A seller need not disclose a patent defect a buyer could see, but must disclose a known latent defect that makes the home dangerous or unfit — and concealing anything removes the protection entirely. Where unpermitted work sits, and how to sell a house honestly.
By Ottawa Property Guide EditorialPublished August 1, 2026 Last verified August 1, 2026
Every seller with a known problem asks the same question: do I have to say something? Ontario's answer is more specific than either "say nothing" or "disclose everything", and the distinction it turns on is worth learning properly.
Seller disclosure in Ontario: patent defects are buyer beware
A patent defect is, in RECO's words, "one that can be detected by a potential home buyer or their home inspector by reasonable observation and inquiry." A cracked window, a stained ceiling, a visibly sagging deck.
For these, the position is straightforward: "A seller does not have to disclose a patent defect to a potential buyer – it is a case of 'buyer beware.'" The buyer is expected to look, and to bring someone who looks professionally.
There is one enormous qualifier, and it is where sellers get themselves into trouble.
However, a seller should not attempt to conceal the patent defect or "buyer beware" may not apply.
RECO, Bulletin 7.4
Concealing a defect is a different act from not mentioning it — painting over a stain to hide it is not the same as staying silent. The first can remove the protection you were relying on and create liability of its own. RECO is explicit that a seller who attempts to hide or cover up a defect faces additional liability. Fixing something properly is fine; making it invisible while leaving it broken is the thing to avoid.
What must I disclose? Latent defects, always
A latent defect is "one that would make a property unfit for habitation, dangerous, or potentially dangerous, and is generally not apparent to someone exercising reasonable care in the inspection of the property."
These must be disclosed where the seller knows about them. The test has two halves that both matter: the defect is hidden, and it makes the property dangerous or unfit — not merely inconvenient or expensive. A structural problem behind a finished wall, a water supply known to be contaminated, a history of flooding invisible in August.
And the standard is not simply what you actually knew:
Even if a seller does not have direct knowledge of a latent defect, they may still be liable if they were willfully blind about the existence of the defect.
RECO, Bulletin 7.4
Which disposes of the strategy of deliberately not investigating something you suspect. Not looking is not the same as not knowing, and a court can treat it as the same thing.
Where a no permit renovation sits
Work done without permits is the most common version of this problem in Ottawa — the finished basement, the converted garage, the deck, the second unit. It is worth separating two questions that get muddled.
Is it a safety problem? Unpermitted work that was done badly — no fire separation, no egress, wiring that would not pass — is heading towards the latent defect analysis, and that is a conversation with a lawyer rather than a judgment call at the kitchen table.
Is it a legal-status problem? Even where the work is sound, the absence of permits is a real issue for the buyer. It affects their insurance, potentially their financing, and their ability to sell it on. Title insurance will not rescue them either — it excludes zoning by-law violations arising from changes, renovations or additions, as title insurance and what your lawyer does sets out.
For a second unit specifically, the permit question is the whole question — an unpermitted apartment is not a feature that adds value, it is a liability the buyer inherits. The rules are in secondary dwelling units and coach houses.
Selling a house with problems: disclosure costs less than the alternative
Set the legal minimum aside for a moment and look at the economics, because they point the same way.
A disclosed problem is priced. A problem discovered during the buyer's inspection is renegotiated, usually from a worse position and with a buyer who now distrusts everything else you said. A problem discovered after closing is a claim, with lawyers on both sides and a number nobody controls.
That is the honest argument for disclosure even where it is not strictly required: the same defect gets cheaper the earlier it is on the table.
Ontario also has a voluntary property information statement, on which a seller answers questions about the property in writing. Using one is a decision to make with your agent and lawyer — it can build confidence, and an inaccurate answer on it is worse than not having completed one at all. If you use it, answer carefully and do not guess.
If you know about something before you list
Write down what you actually know, and when you learned it. That list is what your lawyer needs.
Get advice before listing on which items are latent and must be disclosed — do not decide that yourself.
Fix, or disclose, but never conceal. Making a defect invisible is the act that removes buyer-beware protection.
Get quotes for the things you are not fixing. A disclosed problem with a contractor's number attached is a negotiation; a disclosed problem with no number is a buyer's worst-case guess.
Track down the permits for past work, and if they do not exist, take advice on whether the work can be retroactively permitted before you list.
Tell your agent everything, including the things you would rather not. They cannot advise you around a fact they do not have — and see what you sign when you list for the obligations that flow from the relationship.
The through-line is that almost nobody gets into trouble for having a problem with their house. They get into trouble for what they did about it in the four weeks before listing.
There is no official price list for renovation work, which is why every number you find online disagrees with the last one. This is what a kitchen renovation, a bathroom renovation, a basement renovation, a roof and an electrical panel upgrade typically cost in Ottawa, what each range assumes, and which renovations actually return their money when you sell. The honest headline: the only real number is three written quotes.
What does an inspection cover? A few hundred dollars of clarity on a several-hundred-thousand-dollar decision. What Ottawa inspectors typically look at, what they don't, what the inspection cost buys, and how the deficiencies they find fit a conditional-on-inspection offer.
Between an accepted offer and the keys, a real estate lawyer does work you will never watch: searching the title, finding liens nobody mentioned, and arranging title insurance. What title insurance covers for its one-time premium, the exclusions that matter — including renovations done without permits — and why it is not a substitute for a survey.
The sale price is not what you walk away with. Commission and the HST on it, lawyer fees, mortgage discharge or a mortgage penalty, preparing your house for sale, moving and overlap all come off the top. Here is how to work out your net proceeds before you list — and which line regularly shocks sellers.
Older Ottawa homes carry a short list of specific, findable problems: radon, knob and tube or aluminum wiring, vermiculite insulation, galvanized or lead plumbing, and a buried oil tank. None of them is a reason to walk away on its own. All of them are reasons to write a condition rather than waive one.
August 1, 2026
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