🏛️ BC Court of Appeal Ruling Could Change How Property Disclosure Statements Are Used in Real Estate Transactions

A recent BC Court of Appeal decision — Sewell v Abadian, 2025 BCCA 158 — is sending ripples through the real estate community and could significantly impact how Property Disclosure Statements (PDS) are used and interpreted in property transactions across the province.

🔍 The Case in Brief:

In this case, the seller crossed out every question in the standard PDS form and included only one note:
“Tenanted Property, Owner has never occupied.”

The buyer submitted a subject-free offer, which was accepted. Later, she discovered that the family room had been enclosed without a permit and attempted to walk away from the deal, claiming the PDS was misleading.

At issue: Can a crossed-out PDS still be considered a misrepresentation if the seller has knowledge of a problem and doesn't disclose it?

✅ The Court of Appeal’s Ruling:

Yes.
The Court concluded that even a fully crossed-out PDS can constitute a misrepresentation if the seller knew about issues — such as unpermitted work — and failed to disclose them.

This marks a significant shift from previous understandings where crossing out the PDS was considered a neutral or protective action, especially for:

• Tenanted properties

• Estate sales

• Situations where sellers had limited knowledge of the home

⚖️ Why This Matters for Sellers and Buyers:

This decision challenges common industry practices and could change the way risk is handled in transactions going forward.

📌 Takeaway for Sellers:

If you wish to avoid making any statements or representations about the condition of a property, the best approach may now be to avoid providing a PDS at all. Simply crossing out the standard items and adding a general comment may no longer protect you legally — especially if you are aware of any defects, unpermitted work, or material facts.

📌 Takeaway for Buyers:

Making a subject-free offer is a high-risk move, especially when minimal information is provided. This ruling highlights the need for:

• Thorough due diligence

• Professional inspections

• Asking the right questions — even when disclosure appears limited

Buyers should be cautious and strategic when considering offers without contingencies.

🧭 Navigating Forward:

The Sewell v Abadian decision is likely to influence how contracts are drafted, how disclosure is approached, and how real estate professionals advise their clients.

If you’re navigating a real estate transaction — as a buyer or a seller — it’s more important than ever to have the right advice and representation.

📞 Questions about how this affects you?
Let’s talk. I’m here to guide you confidently through the changing legal landscape of BC real estate.

✨ Tara Kennedy
🏡 REALTOR®, ABR, RENE, SRS
📞 236-992-8989
🌐 TaraKennedy.ca
📧 TaraKennedySells@gmail.com

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