Understand your disclosure duties, mortgage payout, buyer conditions, and closing obligations as a home seller in Canada or the US — before they become disputes.
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Seller disclosure law splits sharply at the border. Nearly every US state requires a written seller disclosure statement covering known conditions — roof, foundation, water intrusion, systems — and federal law adds lead-paint disclosure for homes built before 1978. A false answer on those forms is the foundation of most post-closing lawsuits, and 'as-is' language does not shield active misrepresentation. Canada, by contrast, largely follows caveat emptor ('buyer beware') for patent defects a buyer could see, but sellers remain liable for latent defects they knew about and concealed, and for defects that make a home dangerous or unfit for habitation.
The practical rule is the same everywhere: you are never obliged to disparage your own house, but you may not lie, actively conceal, or contradict what you know. Where disclosure forms are voluntary (as in much of Canada), completing one creates duties that silence would not — so the decision to use one, and every answer on it, deserves care. When in doubt about a specific defect, the cost of a lawyer's opinion before closing is trivial next to the cost of a misrepresentation claim after.
Sellers routinely overestimate their proceeds because they price the mortgage at its balance rather than its payout. Breaking a mortgage early triggers prepayment penalties — in Canada, typically the greater of three months' interest or the interest rate differential (IRD), which on a fixed-rate mortgage signed at higher rates can reach tens of thousands of dollars. In the US, prepayment penalties are restricted on most qualified mortgages originated since 2014, but payout statements still include per-diem interest and fees. Order a written payout statement early; your lawyer or the title company cannot discharge the mortgage at closing without paying the lender's exact figure.
The rest of the net-proceeds math: real estate commission plus applicable tax, legal or escrow/settlement fees, closing adjustments for prepaid or unpaid property taxes and condo fees, and — for non-resident sellers — withholding tax (25% of gross price under Canada's s.116 regime absent a clearance certificate; 15% under FIRPTA in the US). Capital gains treatment differs too: Canada's principal residence exemption can eliminate the gain on a qualifying home, while the US excludes up to $250,000 ($500,000 married filing jointly) of gain on a primary residence, subject to use tests. Exact rules vary by province and state.
Once you accept an offer, your job is to deliver exactly what the contract promises: title free of undisclosed encumbrances, the property in substantially the same condition as when the buyer saw it, the included fixtures and chattels in place, and possession — vacant if promised — on the closing date. Risk of loss typically stays with the seller until closing in Canadian standard forms, so keep insurance in force. During the buyer's conditional period, cooperate with inspections and document requests: a buyer who can still walk away has all the leverage, and delay is the most common deal-killer.
Two obligations trip sellers most often. First, tenanted properties: a tenancy survives the sale in most of Canada and many US jurisdictions, so promising vacant possession requires a lawful termination path — proper notice, and in provinces like Ontario and BC, statutory compensation — timed to actually complete before closing. Second, fixtures: anything attached to the property stays unless excluded in writing. Listing what you are taking, in the agreement itself, prevents the closing-day disputes that sour otherwise clean transactions. A short consultation with a real estate lawyer when you list is the cheapest insurance in the process.
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This guide provides general legal information about selling residential real estate in Canada and the United States. It is not legal advice; disclosure requirements, tenant protections, tax treatment, and closing procedures vary by province and state. Consult a real estate lawyer in your jurisdiction about your specific sale.
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