New REALTORS® Disclosure Rules: What You MUST Know About Material Latent Defects 🏡📜🔍

Navigating real estate in BC just got clearer! The new REALTORS® Disclosure of Material Latent Defects (MLD) Form is here — and while the disclosure duty hasn’t changed, how we document it has. This blog will break down the latest guidance and how to best protect yourself and your clients. ⬇️✨

💡 Why the Change Matters

While the disclosure obligation remains unchanged — licensees must disclose all known material latent defects — the revised form is a refreshed tool to help REALTORS® meet their legal and ethical duties under Section 59 of the Real Estate Services Rules, the REALTOR® Code, and BCFSA/BCREA guidelines.

📏 Legal & Ethical Duties at a Glance

• Section 59(2): If you know of an MLD, you must disclose it in writing to all parties before any sale agreement is signed — separate from the purchase contract.

• Section 59(3): If the seller instructs you not to disclose, you must withdraw from providing trading services.

• REALTOR® Code (Article 4): REALTORS® must discover and disclose all facts that materially impact a transaction — visible or not — including condition, risks, hazards, and past use.

You don’t need to act like an inspector — but ignoring red flags isn’t an option. Asking the right questions and doing reasonable research is key to fulfilling your duty.

🛠 What Counts as a Material Latent Defect?

A material latent defect is something not apparent through reasonable inspection, such as:

• Safety hazards or unfit-for-purpose conditions 🚫

• Issues requiring major repair costs 💰

• Local authority notices or unapproved renovations 🏗

• Missing building permits 📂

Examples: water ingress 💧, structural damage 🏚, unpermitted additions, underground tanks ⛽, high radon levels ☢, or no permit history.

📄 Form Essentials: When & How to Use It

New Form Highlights:

• Formerly known as the “Seller’s Disclosure of Material Latent Defects,” now the REALTORS®’ Disclosure of Material Latent Defects Form — highlighting that disclosure is the REALTOR®’s responsibility.

• Includes a seller acknowledgment, confirming their understanding and authorizing disclosure where required.

When to use it:

🛡 Best Practices & Risk Management

• Always document your due diligence: seller communications, permit checks, FOI requests, inspection notes.

• Retain all disclosures — PDS, MLD form, seller conversations — in your brokerage file.

• Remember: Signatures don’t shift responsibility. Overlooking obvious risks, even after signing, can lead to discipline or liability.

📌 Quick Takeaways for REALTORS®

1. 📜 Disclosure duty hasn’t changed — but documentation tools have.

2. 🛠 Use the new form as both protection and professionalism.

3. 🔍 Investigate diligently and keep records.

4. ✅ The form is proof of integrity and accountability.

📲 Ready to Talk MLDs? Let’s Connect!

Your clients deserve clarity and protection, and you deserve confidence. Whether you're a seller navigating your responsibilities or a buyer curious about what’s hidden, I'm here to help.

Tara Kennedy – REALTOR®
📞 236-992-8989
📧 TaraKennedySells@gmail.com
🌐 www.TaraKennedy.ca

Let’s make your next transaction transparent, compliant, and stress-free. 💬✨

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