This basement flood led to a lawsuit....

Don and Louise Beauchamp owned a home in London, Ont., and during the six years they lived there they renovated their basement, first using it as a playroom and later as a guest room.

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The lessons from this case are:

• For sellers, disclose all problems you know about. If you are not sure, err on the side of disclosure.

• If you as a seller sign an SPIS, to be safe, do not permit it to be attached to the agreement. That way, you will be protected if you made a mistake in completing it.

• Buyers should not rely on the SPIS because it is not supposed to be a warranty; it is just to be used for information purposes.

• If something matters, always include it in your home purchase agreement. Do not rely on verbal promises or advertisements.