Did you know that Sellers (and their real estate representatives) have a duty according
to provincial laws to disclose any defects in a property that might affect a buyer’s use and enjoyment of that property?
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There are 2 kinds of defects the Ontario law differentiates between:
Patent Defects: These are problems with a home that are visible to the buyer or to a
property or home inspector.
These defects are usually easy to see, which is why it is not the seller’s responsibility
to disclose them to buyers.
Visible cracks in a foundation wall, missing safety railings or stains that suggest a roof
leak, are all examples of patent defects.
The legal principle of caveat emptor, or “let the buyer beware” applies to patent defects.It
is the buyer’s responsibility to look carefully, do their research, ask specific questions
and have the home inspected, if necessary, depending on the intended use of the property.
If the buyer does not inspect the property before buying, and subsequently discovers
patent defects, the seller cannot be held liable.
Latent Defects: They are hidden and can’t be seen under normal inspections.
Because latent defects are very difficult for a seller to discover, caveat emptor does
not apply.
Examples of latent defects include a basement that floods during heavy rainfalls, a major
structural problem, hidden fire damage or mould.
If the latent defect was not known to the seller, the seller cannot be held liable for
the defect.
However, if it can be proven that the seller knew of the defect and deliberately failed
to disclose it, the seller may be held liable - especially if the defect makes a property
dangerous or unfit for occupancy.
So, What does this mean?
As the Seller:
You are not responsible for disclosing patent defects.
However, you cannot deliberately hide patent defects (such as painting over leak marks
to conceal defective roofing).
You are responsible for disclosing any latent defects that you are aware of.
If you cover up a patent defect or fail to disclose a latent defect that you are aware
of, the buyer may successfully hold you liable.
As the Buyer:
Because you are responsible for discovering patent defects, make sure to hire an experienced
and qualified home inspector.
You can only hold the seller liable for patent defects if the seller made efforts to hide
these defects.
You are not responsible for discovering latent defects.
However, the seller can only be held liable for these if the seller was aware of them.
It’s important to beware of how these two types of defects establish your responsibilities
as buyer and seller.
As always, hiring good realtors, home inspectors and lawyers is the safest way to avoid headaches
down the line.
If you have any questions or have experienced this situation before, where you bought a
house with problems that were never disclosed to you, leave a comment down below.
I'd love to hear about it.
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