12 Jul Hidden Defects

Hidden Defects

Let me say first that normal wear and tear is not considered a latent defect.  Regardless though, if you receive a complaint from the buyer about discovered issues after the purchase you must reply in kind and acknowledge receipt of their complaint.  Ask the Buyer to provide a written letter with the facts.  You need to know about the evidence being used against you.  This is a requirement as per the Civil Code of Quebec, Section 1739.

It may also be in your interest to ask the buyer permission to visit the property with your expert to further assess the issue.  This gives you the opportunity to look things over and discuss with your expert the issue at hand.  Also, this will help provide you with another estimate to compare with the Buyer’s which will give you negotiating leverage.

The Buyer may ask the Seller for a lump sum payment for the repairs in question or a reduction in the selling price.  For the Buyer to legally want to cancel the purchase of the property there would have to be a very serious defect with the house. For example, let’s say the Buyer moves in with young family in tow and decides to renovate the basement into a family room.  Mould is discovered when the existing drywall and insulation is removed to make way for new materials.  Lab tests indicate that the mould (not all moulds are dangerous) is a dangerous health hazard.  The family finds out they cannot live in their new home until the mould has been removed by a company specializing in its removal.  To add to this problem, the moisture, which caused the perfect environment for mould to establish and grow, was due to cracks in the foundation, which was allowing water infiltration into the house.  So in addition to removing mould, and since the cracks in the foundation are the source of the mould problem, the foundation also requires repairs.  When you do foundation repairs, inevitably it will disturb the landscaping around the house and so forth.  Not only is this a costly undertaking but in addition to this, the quality of life for the Buyer and family has become unsettling and stressful.  To say the least.

The Civil Code of Quebec, Section 1726 states that

“The seller is bound to warrant the buyer that the property and its accessories are, at the time of the sale, free of latent defects which render it unfit for the use for which it was intended or which so diminish its usefulness that the buyer would not have bought it or paid so high a price if he had been aware of them. The seller is not bound, however, to warrant against any latent defect known to the buyer or any apparent defect; an apparent defect is a defect that can be perceived by a prudent and diligent buyer without any need of expert assistance.”

So if the Buyer is aware of any defects prior to the purchase of the house he would have no claim against the Seller because the defect was apparent by the Buyer during visit of property. I’m not sure how one can prove that the buyer was aware or unaware of said defect unless it was acknowledged in writing or witnessed to that effect.  But I digress, if the latent defect happened after the sale the Seller is not held responsible.  However, if the latent defect existed prior to the purchase of the house and manifests itself when the Buyer starts living there then the Seller is held responsible.

Article 1728 of the Civil code of Quebec:

“If the seller was aware or could not have been unaware of the LATENT DEFECT, he is bound not only to restore the price, but to pay all damages suffered by the buyer.”

A defect must be pre-existing, it must be hidden and not apparent, it must be detrimental and it must be unknown to the buyer.

Some examples of hidden defects are:

• Cracks in the foundation
• Mould in the walls or ceiling that might not have been visible to the inspector
• A clogged drainage system
• An infestation
• Inadequate wiring, plumbing, heating or cooling
• Leaks or drainage problems with the plumbing
• Violent death or suicide having occurred in the property
• Criminal activity at the property, or mob or gang ties

Building inspectors also have legal obligations, but their job is to perform a visual inspection to uncover apparent defects. They are not responsible for finding hidden defects, but are responsible for detecting visual signs that could indicate the presence of a hidden defect.

If the building inspector notices something that could be a sign of a hidden defect, he’ll recommend in the inspection report that further investigation be done by another professional that specializes in that type of work. It’s important to note that if a building inspector reports signs of what could be a hidden defect, the defect is no longer considered hidden because the buyer was alerted to the possibility of its existence before the purchase.

If the contract stipulates that the property was sold at Buyer’s Risk with no legal warranty, the Seller could not be held responsible for any issues discovered by Buyer after purchasing the house.

In most cases of hidden defects, it is the seller who is held responsible.  It is important therefore that the Seller be as transparent as possible and provide as much information on the house as is possible to the potential Buyer.  This transparency will weigh in favour of the Seller should any legal action be taken by the Buyer.

 If you cannot resolve the issues amongst yourselves, seek legal counsel.  Keep in mind that going through the courts is time consuming and costly.

This article in no way replaces legal advice and it is recommended that should you have questions pertaining to the above mentioned, and in order to make the correct decision (s) for your particular issues, that you seek counsel by a legal professional.

Geoffrey Darwent CPI

Condominium Management & Residential Home Inspector, CPI

Gestion de condominium & Inspecteur des immeubles résidentiels, IPC

Assuré / Insured

Member InterNACHI

Membre InterNACHI-Québec