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Why would a home seller lie about residency in property?

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  • Feb 8th, 2018 7:06 pm
[OP]
Newbie
Mar 21, 2013
11 posts
16 upvotes
Montreal

Why would a home seller lie about residency in property?

So here's a weird situation. We are currently in the process of finalizing a home purchase. Throughout our visits to the home and our inspection, it has become apparent that the seller is not residing at the property (lack of furniture, divorce papers seen in the office, etc..). We haven't called the seller or selling agent out on this just yet, but they have continuously claimed that she is still married and living at the property in casual conversations. Yesterday, we had a plumber come do a drain inspection and he noticed a lot of spider webs throughout the outgoing drains of the house, clearly indicating that not a lot of water has been flowing for quite some time. When the plumber asked about this, the seller awkwardly claimed that she is living there and gave a very strange response...

Anyways, we have already had a full inspection and for the most part there are no major issues, but I'm just so curious as to why they would lie about this and what implications this might have.. I understand maybe the divorce is not something she would want to discuss, or perhaps it has not been finalized, but wouldn't they legally need to disclose the fact that no one is living at the house?
28 replies
Deal Fanatic
Oct 6, 2007
8809 posts
5769 upvotes
Kootenays
It's probably being claimed as a principal residence to avoid capital gains taxes. IMHO, give her a break. Divorce is a trying time. No sweat to you and a huge thing to them.
Jr. Member
Mar 6, 2015
192 posts
241 upvotes
smacd wrote: It's probably being claimed as a principal residence to avoid capital gains taxes. IMHO, give her a break. Divorce is a trying time. No sweat to you and a huge thing to them.
This has nothing to do with it.

First of all, the PR exemption can apply even if the sellers lived in the house for only a portion of the year. Second, what's reported on the sellers declaration is not what is reported to CRA. Two very different things.
Sr. Member
Apr 8, 2010
786 posts
432 upvotes
toronto
maybe some would take it as they're desperate to sell and might low ball? who knows but if everything checks out, no harm to you
Deal Expert
User avatar
Nov 15, 2004
19626 posts
3614 upvotes
Toronto
MTLCPA wrote: This has nothing to do with it.

First of all, the PR exemption can apply even if the sellers lived in the house for only a portion of the year. Second, what's reported on the sellers declaration is not what is reported to CRA. Two very different things.
Maybe so, but it certainly sounds like something an uninformed person trying to avoid being caught would do. She may be worried about an audit coming across her declaration and taking her to task for it.
Jr. Member
Mar 6, 2015
192 posts
241 upvotes
Piro21 wrote: Maybe so, but it certainly sounds like something an uninformed person trying to avoid being caught would do. She may be worried about an audit coming across her declaration and taking her to task for it.
Maybe so indeed. But it does sound like the sellers are trying to keep the value of their vacant house up by lying and saying the house is being lived in. Also, it sets a bad tone now that the potential buyer caught them in a lie. If sellers are lying about this, what else might they be lying about?
Deal Guru
Jan 25, 2007
10228 posts
5449 upvotes
Paris
Much like the unemployed, unoccupied houses are shown less love. I’d put it aside.
Deal Addict
Apr 24, 2007
2333 posts
615 upvotes
I'm certain they feel they may lose some leverage if you know they really need to sell it.
Deal Addict
User avatar
Dec 27, 2011
3518 posts
1780 upvotes
Waterloo
zero122 wrote: So here's a weird situation. We are currently in the process of finalizing a home purchase. Throughout our visits to the home and our inspection, it has become apparent that the seller is not residing at the property (lack of furniture, divorce papers seen in the office, etc..). We haven't called the seller or selling agent out on this just yet, but they have continuously claimed that she is still married and living at the property in casual conversations. Yesterday, we had a plumber come do a drain inspection and he noticed a lot of spider webs throughout the outgoing drains of the house, clearly indicating that not a lot of water has been flowing for quite some time. When the plumber asked about this, the seller awkwardly claimed that she is living there and gave a very strange response...

Anyways, we have already had a full inspection and for the most part there are no major issues, but I'm just so curious as to why they would lie about this and what implications this might have.. I understand maybe the divorce is not something she would want to discuss, or perhaps it has not been finalized, but wouldn't they legally need to disclose the fact that no one is living at the house?
Well what did she say?
[OP]
Newbie
Mar 21, 2013
11 posts
16 upvotes
Montreal
crystallight wrote: Well what did she say?
She gave a rambling response that just didn't have anything to do with the question, and combined with all of our other observations, it seems likely that no one is residing at the home. I admit that anything is possible, so maybe she is actually living there but is just weird... who knows... In any case, I guess this just got me curious about why someone might lie about residing at a property up for sale and what implications this might have.
[OP]
Newbie
Mar 21, 2013
11 posts
16 upvotes
Montreal
I'm pretty confident that even though they might not actually be currently living at this particular home, they are in fact Canadian residents (and are still living and working in Canada). Although now that I think about it, I do remember hearing the seller mention she used to live in the US for many years, so maybe there is something more to this...
Sr. Member
Oct 14, 2012
699 posts
437 upvotes
Woodstock
I'd ask your lawyer what happens if you find out she is NOT the owner and has no legal right to be selling the house. What if the owners are in a long-term-care home or hospital and this is one of the children trying to sell it out from under them? I'd want some detailed assurance from my lawyer that I will get my money back if the title is not legally being sold to me. And how long might it take to get my money back if we find it is title fraud. Be careful!
Sr. Member
Apr 2, 2013
562 posts
566 upvotes
Barrie
Perhaps this is just another way of saving money. The divorce could merely be a tax-saving scheme; a lot of people are doing it now in the upper-middle class. They do it for the tax breaks to save money. Back to 2 separate incomes saves them tax, 2nd property purchased to flip while enjoying the benefits of separate residences, RRSP-flipping in "settlement" to avoid the taxation, putting part of the retirement pension into the child's name, all the while living together at it is all just for show. I have a friend who was recommended it by an accountant so that may be what she is doing as well.
Jr. Member
Mar 6, 2015
192 posts
241 upvotes
BetCrooks wrote: I'd ask your lawyer what happens if you find out she is NOT the owner and has no legal right to be selling the house. What if the owners are in a long-term-care home or hospital and this is one of the children trying to sell it out from under them? I'd want some detailed assurance from my lawyer that I will get my money back if the title is not legally being sold to me. And how long might it take to get my money back if we find it is title fraud. Be careful!
Risk could also be that the sellers aren't residents of Canada and are trying to get out of having to pay CRA their withholding taxes on the sale of the property.
Deal Fanatic
User avatar
Dec 27, 2009
7402 posts
4671 upvotes
Victoria, BC
Isn't the answer to this obvious? People will tend to lowball on a property if they think it is unoccupied (seller will be more desperate to get rid of it). I always look for clues as to whether or not someone really lives there when I'm going through a house for sale.
Deal Expert
User avatar
Jun 12, 2007
16419 posts
5148 upvotes
London
Could be a child custody issue. Wife might have been awarded sole custody based on her having a house for the child to live in. She might not want her ex to find out she's not really living in the house and try to reopen the issue

Spousal support ? - wife was awarded funds based on certain monthly expenses related to living in the house. If she's not living there, maybe the ex can reopen the spousal support arrangements?
Last edited by l69norm on Feb 6th, 2018 6:56 pm, edited 1 time in total.
Sr. Member
Jan 15, 2013
890 posts
158 upvotes
Mississauga
BetCrooks wrote: I'd ask your lawyer what happens if you find out she is NOT the owner and has no legal right to be selling the house. What if the owners are in a long-term-care home or hospital and this is one of the children trying to sell it out from under them? I'd want some detailed assurance from my lawyer that I will get my money back if the title is not legally being sold to me. And how long might it take to get my money back if we find it is title fraud. Be careful!
That's what the title search is for and it is the buyer's lawyer's due diligence to check this.

Anyway, if I were OP and everything checks out, I'll be fine. In certain cases (like mine), everything was kept to original and I can tell nothing was touched. I'd be more worried if the seller's done some renos/fixes prior to selling the home.
Deal Addict
Mar 21, 2006
4478 posts
474 upvotes
Burlington, Ontario
She's a ghost.
Audio - Video - Data - Security - This is what I do
Member
Nov 24, 2008
316 posts
143 upvotes
Dartmouth NS
Just to note that if she's not living in the house, she's very likely violating the terms of her house insurance. The impact to you if something happens is small although potentially annoying if the purchase falls through, but the current owner might not get an insurance payout if they investigate and find she's been living elsewhere.

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