Posted:June 8, 2016

Buyer Beware – Patent and Latent Defects

The term “Buyer Beware” (or caveat emptor) should be on the mind of any homebuyer. It is generally the homebuyer’s responsibility to satisfy himself or herself about the state of repair of the property being purchased. A vendor is not required to disclose the existence of defects which can (and should) be found during an ordinary inspection (patent defects) and there is a fairly high onus on the homebuyer to conduct a proper inspection to discover patent defects.

Fortunately, vendors still have some obligations to disclose (and not conceal) certain defects/problems. A homebuyer will have a claim against a vendor where the vendor was aware of a “latent defect” and failed to disclose it. Latent defects are faults/problems with property which would not be discovered during a reasonable inspection. A homebuyer may also have a valid claim against a vendor for patent defects in situations where patent defects were intentional concealed or hidden by the vendor.

Although it will give homebuyers some comfort knowing that they may have recourse against vendors in relation to latent and concealed defects, it can sometimes be difficult to establish whether the vendor knew about the problem. Due to a homebuyer’s obligations to deal with patent defects before completing a purchase, as well as the hurdles (and costs) that can be involved with remedying latent and concealed defects, homebuyer’s should minimize their risk as much as reasonably possible. The following are suggestions for homebuyers to protect themselves before purchasing real estate property:

1. Always hire a reputable home inspector to examine the property.

2. Complete your own thorough investigation of the property, and ask the vendor about issues that are important or concerning to you.

3. If any representations or assurances are provided to induce you into purchasing the property, ensure they are specifically referred to in the purchase agreement (most purchase agreements include standard clauses that state no representations or warranties were provided aside from what is contained within the written agreement).

4. Talk to a real estate lawyer and/or a realtor before signing a purchase agreement. A lawyer and realtor can identify various issues which you may want to consider.

5. Research your builder if you are buying a new home. Yes, even new homes can have problems. Talk to homeowners in the neighbourhood and find out if they were satisfied with the builder. Ensure the builder is registered with Tarion by referring to the Ontario Builder Directory at www.tarion.com where you can find out how many homes they have built in the last 10 years, and whether the builder has had any claims during this time period.

Jamie Pereira regularly represents clients in relation to a full range of real estate matters serving Norfolk County (including Simcoe, Port Dover, Waterford, Delhi, Turkey Point, Port Rowan, Langton and Long Point), Haldimand County, Oxford County, and Brantford, as well as other areas throughout Ontario. If you are looking for a real estate lawyer or have any questions you can contact Jamie directly at pereira@mhnlawyers.com or 519-426-6763.

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