What to Disclose When Selling a House With Foundation Problems

If you know about a foundation problem or a history of basement water, assume you have to tell the buyer. Most US states require a written seller disclosure form that asks about the foundation and water intrusion directly, and in Canada the courts have held sellers liable for hiding known defects even where no form is mandatory. Past repairs are usually disclosable too, which is where good paperwork works in your favour.

This is a general overview of how the rules work in several provinces and states, not legal advice. Disclosure law changes, and your real estate lawyer or notary has the final word on your sale.

Why foundation issues get special treatment

Disclosure rules usually focus on defects a buyer could not reasonably spot during a normal viewing or inspection. Foundation and water problems fit that description almost perfectly. A freshly painted basement wall can hide a repaired crack, a finished basement can hide efflorescence and old water lines, and a dry October showing tells a buyer nothing about what happens during the spring thaw.

They are also expensive to fix, which is why buyers so often take them to court after closing.

Canada: no national form, but hiding defects is risky

Real estate law in Canada is provincial, and most provinces still start from the old principle of "buyer beware." That principle has limits, and foundation problems tend to land right on them.

Ontario

Ontario has no mandatory seller disclosure statement. The Ontario Real Estate Association's Seller Property Information Statement (SPIS) exists, but filling it out is optional and many listing agents now advise against it. That does not leave sellers free to stay silent about everything. Ontario courts have found sellers liable where they knew about a latent defect that made the home dangerous or unfit to live in and did not disclose it, and where they actively concealed a problem (for example, drywalling over a known crack or repainting water stains right before listing). If you answer a buyer's question, the answer has to be truthful. If you do fill out an SPIS, every "no" on the water and structure questions is a statement you can be held to.

British Columbia

In BC, the Property Disclosure Statement is a standard form that many sellers complete, though the law does not force it. The same court-made rules apply as in Ontario: a seller must disclose known latent defects that make the property dangerous or uninhabitable, and must not misrepresent anything on the form. The PDS asks about structural problems and about water damage or leakage, so a seller who has dealt with a leaking foundation wall should expect to answer that question honestly.

Alberta

Alberta has no mandatory seller disclosure form either, and "buyer beware" still carries weight. Buyers are expected to inspect. Concealment and fraud are exceptions, and a seller who covers up known foundation movement can be sued.

Quebec

Quebec works differently because the Civil Code gives buyers a legal warranty against latent defects. A seller can be liable for a hidden foundation defect even if they did not know about it. That topic has its own post: latent defects and foundation problems in Quebec.

United States: disclosure forms are the norm

Most states require residential sellers to fill out a disclosure form, and the foundation and water questions are almost always on it. A few examples:

New York

The Property Condition Disclosure Act requires sellers of most one to four family homes to deliver a Property Condition Disclosure Statement before the buyer signs the contract. For years sellers could skip the form and give the buyer a US$500 credit at closing instead. An amendment that took effect in March 2024 removed that option, so the form now has to be completed. It asks about structural defects in the foundation, and about flooding, drainage and rot.

California

California sellers of one to four unit homes must provide a Transfer Disclosure Statement under the state Civil Code. The form asks about defects in the foundation and slabs, and about settling, slippage or other soil problems. Separate hazard disclosures cover flood and seismic zones.

Texas

The Texas Property Code requires a Seller's Disclosure Notice for most single-family resale homes. The notice asks whether the seller is aware of defects in the foundation and slab, previous foundation repairs, and water penetration or flooding. "Previous foundation repairs" is a separate line, so even a properly fixed problem has to be mentioned.

Illinois

The Illinois Residential Real Property Disclosure Act sets out a specific form. Among its questions: whether the seller knows of flooding or recurring leakage in the crawl space or basement, and whether they know of material defects in the basement or foundation, including cracks and bulges. The form only covers what the seller actually knows, but a false "no" opens the door to a lawsuit.

Florida

Florida has no single statutory form, but the Florida Supreme Court's decision in Johnson v. Davis (1985) requires sellers of residential property to disclose known facts that materially affect the property's value and are not readily observable by the buyer. Sinkhole activity and foundation settlement are classic examples, and most Florida agents use a standard disclosure form that asks about both.

Does a repaired problem still need to be disclosed?

Usually, yes, at least in states whose forms ask about past repairs (Texas asks outright). Even where the form only asks about current conditions, leaving out a recent underpinning job or wall anchor installation can look like concealment if the buyer finds it later.

A well documented repair is often a selling point, not a red flag. A file that shows what was wrong, what was done, who did it and how long the warranty runs answers most of their questions before they are asked.

What paperwork to gather before you list

If you have had foundation or waterproofing work done, pull these together before the listing goes live:

• The written quote or contract describing the scope of work
• Any engineer's report or letter that came before or after the repair
• Building permits and final inspection sign-offs, where the work needed a permit (in Ontario, structural work like underpinning usually does)
• Photos taken during the job, especially of excavated walls or pier installation
• Warranty documents, and whether the warranty transfers to a new owner
• Receipts and invoices showing the work was paid for and completed

If you know about a problem but have not fixed it, you have two broad choices: repair it before listing and disclose the repair, or disclose the problem and expect it to come up in the price. Getting a written assessment with a repair scope gives you real numbers to work with either way. For crack repair options, see our foundation crack repair service, and for typical price ranges, the cost guide.

Frequently asked questions

Does a repaired foundation crack have to be disclosed?

In most US states with a disclosure form, yes, because the forms ask about foundation defects and often about previous repairs. In Canadian common law provinces the duty is narrower, but answering a buyer's question untruthfully or hiding a repair can still make you liable. Disclosing the repair along with the paperwork is usually the safer route.

Can a buyer sue after closing for an undisclosed foundation problem?

They can, and foundation and water claims are among the most common post-closing disputes. A buyer generally has to show that you knew about the problem and concealed it or misstated it (Quebec is the main exception, where the legal warranty can apply even without knowledge). Deadlines to sue vary by province and state, so buyers and sellers both should get legal advice early.

Does a hairline foundation crack need to be disclosed?

Small shrinkage cracks in poured concrete are common and often cosmetic. If a disclosure form asks about cracks or foundation defects, though, the safest approach is to mention any crack you know about and add context, such as when it appeared and whether it has leaked or grown. Our post on cosmetic versus structural foundation cracks explains how to tell them apart.

Does selling "as is" remove the duty to disclose?

Not by itself. An "as is" clause usually limits the repairs a buyer can demand, but in most US states it does not cancel the statutory disclosure form, and in Canada it does not protect a seller who actively hid a known defect. Talk to your lawyer before relying on it.

Get a written assessment before you list

If you are planning to sell and want to know where your foundation stands, send us the details. We can line up a local specialist to inspect, find the cause of any cracks or water, and put the findings and repair options in a written quote you can use in your disclosure file.