Investors call on Realtors to disclose rental status

Frustrated home buyers are calling on Realtors and lawyers to reveal the ‘true’ rental status of properties after some investors have been left with hefty renovation bills.

Realtors and lawyers should be forced to disclose any changes in a city’s bylaws that may affect the viability of renting a property. That is the call from one frustrated landlord in Winnipeg who recently made such a request to the local city council.

The investor made the appeal after discovering that the basement of her property was deemed unusable as a dwelling unit due to a current bylaw. She says that she was never told this during the sales process and is now facing a $7,000 bill to become compliant.

The appeal was subsequently denied by city council officials.

Speaking to CREW, Reg Kehler, a RE/MAX agent in Winnipeg, says that knowing it would be used as a rental property, “a majority” of Realtors would have discussed such bylaws with the buyer. “I'm surprised that her real estate agent didn't point out to her that the basement windows weren't up to code,” he says.

Monika MacMillan, sales representative with Bosley Real Estate Ltd, says buyers need to understand the provisions in the Agreement of Purchase and Sale where the seller does not guarantee that the future use of a property will be legal, unless agreed otherwise.

"I think perhaps adding an appropriate condition regarding the zoning issue would have been helpful in this case. Ultimately, if the property is not recognized as a legal rental property, it should not have be listed as such. But if changes are made to the by-laws after the fact without prior notice, I don't think a Realtor should be held responsible."

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