You asked your seller whether there were any issues with the house. They said no. You wrote the listing. RECO's position is that this does not meet the standard. Its wording on the reasonable steps required to determine material facts is that they are "not met by simply accepting the seller's verbal representations" - which is exactly where most listing files stop.
This is the section with the longest tail. An advertising breach costs a fine; a missed material fact turns into litigation years later. Below is RECO's Bulletin 7.3 and Bulletin 7.4, read on September 19, 2026.
A material fact is defined by the client, not by the house
There is no master list, and RECO is explicit about why: "What is a material fact to one buyer or seller may not factor into another client's decision-making process."
The examples it gives span things you would think of and things you would not:
- insulation type and plumbing materials
- the condition of major systems
- flooding history
- permit status on past work
- property taxes and zoning restrictions
- previous illicit use of the property
- title restrictions
- nearby facilities that affect quality of life
Half of that list is not about the building at all. Zoning, taxes, what is being built two streets over - those are facts about the situation, and they are on RECO's own list.
The four steps
For a client, the obligation is a sequence rather than a single act:
- take reasonable steps to determine the material facts
- promptly disclose them to the client
- advise the client to consider whether those facts might affect their decision
- make best efforts to obtain an acknowledgement, and give the client a copy of it
Step three is the one that gets compressed out. Disclosing a fact and advising someone to weigh it are different acts, and the second is what turns a line in an email into advice a client can act on.
On the listing side, asking is not determining
This is the sentence to sit with. Reasonable steps are not met by accepting what the seller tells you. Verification and documentation are expected.
In practice that means the questionnaire is a starting point, not the file. Permits for the finished basement are a search, not a recollection. A flooding history is something neighbours, the municipality and the insurer may all know more about than an owner who bought after it happened. None of this makes you an inspector - it makes you someone who asked a second question.
The uncomfortable version: if a buyer's lawyer later finds an open permit in thirty seconds of searching, "the seller told me it was fine" is the answer that creates the problem rather than solving it.
On the buy side, materiality is found in conversation
Because materiality is client-specific, you cannot know what matters to a buyer without asking. RECO frames this as discovery: use the conversation to work out what would actually change this person's decision.
A buyer with a severe mould allergy, one who works nights, one planning a basement suite, and one who intends to tear the house down have four different lists. The same rear-lane development is decisive for one and irrelevant to another.
RECO's tie-breaker is one line and it is the right default: "When in doubt about whether something may constitute a material fact to the client, disclose and explain it to them."
Latent and patent, and where the duty comes from
Bulletin 7.4 is about a different thing: what the seller is legally obliged to disclose. Worth knowing precisely, because it does not come from TRESA.
| Patent defect | Latent defect | |
|---|---|---|
| What it is | Detectable by a buyer or their inspector through reasonable observation and inquiry | Would make the property unfit for habitation, dangerous or potentially dangerous, and is generally not apparent to someone inspecting with reasonable care |
| Must the seller disclose it? | No - buyer beware | Yes |
| May the seller conceal it? | No | No |
The duty on latent defects comes from case law rather than from TRESA or its regulations, and failing to disclose is potential misrepresentation with litigation attached. So this is not a regulatory rule your brokerage can interpret internally. It is the kind of question that ends up in front of a judge, which is why the answer to "should we mention it" is almost always yes.
Note the bottom row. A patent defect need not be volunteered, but it may never be hidden. Painting over a crack is not the same decision as not mentioning it.
If you know, you tell every interested buyer
Here is the part that surprises listing agents. Where the seller's agent knows of facts the seller is legally obliged to disclose, the agent's own obligation is to:
- disclose them to every buyer that expresses an interest in the property
- use best efforts to obtain an acknowledgement from each buyer who receives the disclosure
- provide a copy of that acknowledgement to any buyer who makes one
Every buyer who expresses interest. Not the one who writes. Not at the offer stage. And the duty sits on you, which means a seller's preference that it stay quiet is not something you can accommodate.
That is the conversation worth having at the listing appointment rather than the week an offer arrives, because by then the choice has become a confrontation.
Where the bulletins stop
Two honest gaps, said out loud rather than filled in.
Bulletin 7.3 does not address self-represented parties, what to do when a seller refuses disclosure, or where a registrant's expertise ends. Bulletin 7.4 does not say what to do if a seller will not disclose a latent defect, and gives no worked examples.
So the question every agent eventually has - my seller knows about the flooding and will not disclose it - is not answered in the bulletins. What 7.4 does say is that your own disclosure duty exists where you know of such a fact. That is the thread to pull with your broker of record and, realistically, with a lawyer. Anyone who tells you the bulletins settle it has not read them.
What to do this week
Change one question at your listing appointments. From "are there any issues?" to "what would a buyer's lawyer find?" The first invites a no. The second invites a list.
Verify the two that are cheap to check. Permits on visible past work and the zoning. Both are searches, both take minutes, and both appear on RECO's own examples list.
Write down what each buyer told you matters. Materiality is defined by them, so the discovery conversation is evidence. A note saying this buyer raised basement moisture on the first call is what makes a later disclosure obviously relevant.
Ask for the acknowledgement every time. Both bulletins land on best efforts to obtain one. Best efforts you can show beats a recollection.
Frequently asked questions
Is there a list of material facts I can work from? No, and that is deliberate. RECO says what is material to one client may not factor into another's decision at all. Its examples run from plumbing materials and flooding history to zoning, taxes, past illicit use and nearby facilities, but the test is whether it would affect this client's decision.
Is asking the seller enough? No. RECO states that reasonable steps are "not met by simply accepting the seller's verbal representations". A questionnaire is where the work starts; verification and documentation are expected.
What is the difference between a patent and a latent defect? A patent defect can be found by a buyer or their inspector through reasonable observation and inquiry. A latent defect would make the property unfit for habitation, dangerous or potentially dangerous, and is generally not apparent to someone inspecting with reasonable care. The seller must disclose latent defects; patent ones are buyer beware, though neither may be concealed.
Does the duty to disclose latent defects come from TRESA? No. Bulletin 7.4 is explicit that it stems from case law, and that failing to disclose is potential misrepresentation that may trigger litigation.
If I know about a latent defect, who do I have to tell? Every buyer that expresses an interest in the property, with best efforts to obtain an acknowledgement from each and a copy provided to any buyer who makes one. It is your obligation as the seller's agent, not something that waits for an offer.
What if my seller refuses to disclose? The bulletins do not answer that, and it would be wrong to pretend otherwise. What 7.4 does establish is that your own disclosure duty exists where you know of such a fact. Take it to your broker of record and to a lawyer rather than to a forum.
Am I expected to find defects an inspector would find? Bulletin 7.3 does not address the limits of a registrant's expertise. Reasonable steps are what is asked for, not an inspection - but "reasonable" has already been defined to exclude taking the seller's word alone.
Where is the authoritative version? RECO's Bulletin 7.3 and Bulletin 7.4. Bulletins explain duties rather than creating them, and the latent-defect duty in particular comes from case law. This is a practice summary, not legal advice, and this is the topic where that sentence is doing real work.
The full map is our plain-English index of every RECO bulletin. Next door: lockboxes and property access, dealing with a self-represented party, and what counts as a financial benefit.