Buyer Beware when it comes to real estate.
Author: Kristina Bradley
In the world of residential real estate, there are two kinds of defect that buyers and sellers should be aware of. The patent and the latent.
Patent defects are those that can be discovered by inspection and ordinary vigilance on the part of the buyer.
The seller is not under obligation to disclose a patent defect because the buyer should have detected the defect in their reasonable investigation of the home. For example a broken window or hole in the carpet.
However, if a seller makes an effort to conceal, hide or cover up a patent defect with the intent of misleading the buyer or throw off their suspicions, this is considered fraudulent misrepresentation and the buyer has the right to pursue legal recourse.
Latent defects are issues and defects that would not be revealed through the course of the ordinary inquiry that the buyer or his inspector is in a position to make before entering into a contractual agreement. These would include:
- defects that are expensive to repair
- notices received by the seller from governments or authorities that request changes or repairs to the property
- not having obtained the appropriate building (or other) permits for the property
If the seller was aware of a latent defect and failed to disclose it, this may be seen as a misrepresentation and give the buyer the right to take legal action against the seller.
Some examples of latent defects:
- the seller covers a large crack in the basement wall that affects the structural integrity of the home
- the seller builds an addition without taking out the appropriate permits
- the seller knows that every time it rains water drips down the basement wall
- Hire an accredited home inspector.
- Do your own thorough inspection of the home and don’t rely on the statements of others.
- Review the SPIS if available and where possible insist on getting more details.
- Include representations and warranties in your purchase and sale agreement that ensure you have legal recourse in the event that what the seller has told you about the state of the property proves to be untrue.
- Inspect the home after conditions are optimal for any suspected issues ie) after a heavy rainfall.
- Investigate problems that could potentially arise in another season or at a different time of day ie) noise levels in a school zone or cooling in the summer.
- Get answers to any questions that have concerned you in writing.
- Tell your agent and the seller’s agent of any issues that are of material concern for you ie) noise levels during the day as you work nights, and ask them to address those concerns in writing.
- Where there are any suspicions seek the advise of an expert in addition to the regular home inspection in any of the following areas:
Buying or selling a home is likely the biggest financial transaction that you will undertake in your life. If any questions, suspicions, doubts, red flags or “feelings” come up, do yourself a favour and seek the advice of legal professionals.