A recent news story was just published in Simcoe.com pertaining to a couple that purchased a home in the southern Georgian Bay area a year ago. This story is yet another example as to why due diligence is so important when buying or selling a home or other property. The subject property in this story has a septic system versus municipal sewers. It would appear that unbeknown to the Buyers at the time they purchased, the local municipality had plans to install municipal sewers and said installation is going to cost these homeowners and others in the area over $30,000 each.
Being in real estate I often deal with properties that are serviced by wells, septic systems, municipal water/sewer systems and sometimes a combination of both. My own home in the Thornbury area is on well and septic. My wife and I just did work on our septic system to facilitate adding an addition to the house, the cost for which was over $10,000. I also own a cottage and back in the late 1990’s that property became serviced with a newly constructed municipal sewer and water system. The cost payable to the local municipality at that time was just under $6,000. We have a lengthy distance of over 180 feet from our property line to the cottage which resulted in a further cost of $18,000 covering the pipeline construction to connect to the system. My personal experience has aided me greatly in assisting clients to identify and address issues such as this. Many Buyers in our area are from the Greater Toronto Area or other urban locations and as such they have limited or no knowledge about septic systems, wells etc. Therefore it becomes our responsibility as local and knowledgeable real estate “experts” to help them navigate through these unknown waters, no pun intended.
During my over 20 years as a real estate Broker serving the southern Georgian Bay region, I have had a number of clients comment on how thorough I am. Many of my clients have used me more than once to buy and or sell. Sometimes they call me for real estate advice simple stating “we trust you” which I take as a compliment and for which I am deeply flattered.
Being trusted is not something that I take lightly nor should anyone in the real estate or any profession do. As licensed real estate practitioners in Ontario, we are required by law to provide the utmost “duty of care” in looking after the best interests of our clients, those people that we have entered into a formal agreement with to represent them in a real estate transaction. Establishing trust with people requires a lot of qualities many of which are based around both character and competence. Every time I look at a property to list for sale or if I am showing a property(s) to prospective Buyers looking to purchase, I thoroughly scan each property and the listing information looking for facts both positive and negative that could impact either the Seller(s) or Buyer(s) decision making and overall well being. Typically some further investigation is required in the form of “due diligence” to reduce any risk a Buyer(s) or Seller(s) may face with a given real estate transaction. This is why Agreements of Purchase and Sale have conditions covering things such as a home inspection, the Buyer’s ability to obtain a mortgage, insurance, a building permit, what the local zoning allows etc.
In the case of the property in the above mentioned story there is no mention as to whether the Buyer’s did a septic inspection or if they or their real estate sales representative made any inquiry into the possibility of sewers being installed at some point in the future. A simple call to the local municipality asking about sewers would have been an easy way to clarify any potential plans that might have impacted the purchaser’s decision to buy. No one likes surprises nor can you afford them when the cost runs into tens of thousands of dollars as they do here.
As REALTORS® we are required under law and through our Code of Ethics to meet a number of criteria when acting on behalf of a client(s) including but not limited to: acting in a client’s best interest, discovering material facts, rendering conscientious, competent service and other initiatives that would ensure we provide the utmost in fiduciary duties to the a client(s) and their decision making. If something goes wrong we simply can’t say “we didn’t know.” We are expected to know, it’s our duty to find out or in some in stances to refer them to the appropriate expert such as an accountant or lawyer.
Once licensed, REALTORS® in Ontario can trade in real estate anywhere in the Province. The first question to ask is should they? Can a REALTOR® provide conscientious and competent service to a client(s) in a market that may be one hundred, two hundred miles or further away from where they normally conduct their business? With over 20 years experience as a real estate Broker and with my Market Value Appraiser designation I am more than competent with respect to real estate in this area. Does that me I should be selling homes in Windsor, Ottawa or Thunder Bay? No, I am not and I would refer those Buyers to someone that knows those respective markets much better than I do.
After reading the above referenced story I did a little research. The home in question was listed for sale by a real estate Brokerage outside of the southern Georgian Bay area. Further, the real estate sales representative that sold the home was also outside the area and was not a member of the Southern Georgian Bay Associations of REALTORS®. That being said I have no idea as to what level of knowledge they have of this market. Further I do not know what if any due diligence either the listing or selling REALTORS® undertook relative to determining the potential of sewers being installed and at what cost to these and other affected homeowners in the area. The article appears to suggest these homeowners were unpleasantly surprised to learn of the arrival of municipal sewers and the associated cost.
If in fact the sewer installation and $30,000 plus price tag was not discovered and or disclosed to these Buyers when they purchased, it should have been. The Latin phrase Caveat Emptor “let the buyer beware” just doesn’t cut it and I for one would not want to defend myself against any litigation using that as my defense.