Sellers and buyers, beware – of hidden defects

Whether you sell or purchase a property, you may be faced with one of the following situations that must be dealt with promptly.

If you sold your property, or you intend to do so, claims can be made against you for hidden defects months or even years later. For example, water infiltration from the roof, leaking or cracking basement foundations, pyrite, etc. Claims can be made against you even if you had no knowledge of the defect when you sold the property.

If you have purchased a property, you may have recourse against your vendor for hidden defects which render the house unfit or would have caused you to pay less for it in order to repair the defect. As soon as you have knowledge of a defect, you must obtain legal advice immediately. In doing so, you will avoid missing important legal deadlines which will limit your recourses.

The Civil Code of Quebec (art. 1726) defines a hidden defect. First, the defect must be material, namely, it must have a certain degree of importance. In other words, the defect must render the property “unfit for the use for which it was intended” or “so diminishes its usefulness that the buyer would not have bought the said property or would have paid less if he had known it”. Second, by definition, the defect must be hidden. If the defect is apparent to a prudent and diligent buyer without the need of an expert, or, if the hidden defect is known to the buyer, then the legal warranty against hidden defects will not apply.

If the property is defective, the buyer must give notice of the defect in writing to the vendor within a reasonable delay after discovering the defect. This notice will permit the seller to remedy the defect. If after this first notice the vendor refuses to remedy the defect, then, the buyer must send the seller a demand letter stipulating the amount of the damages claimed and providing the seller with a delay for payment. Failure to provide either of these notices can result in a claim being dismissed.

For advice as to how to safeguard your rights in your specific situation contact us: (514) 534-0145 (ext 224).

This article is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations.