One of the worst things that can happen to any buyer is to buy a property and then find out later that there is a serious, hidden, problem with the house that had not been disclosed.
A pre-purchase inspection carried out by an inspector is also not a complete protection against the risk of hidden defects.
Of course, a pre-purchase inspection is essential and will drastically reduce this risk but a problem could be hidden in a place that an inspector cannot see.
What exactly does a hidden defect mean? What are the remedies? What are your rights as a new owner?
To make a smart investment, find out everything you need to know about hidden defects before buying a property!
A hidden defect is a serious imperfection that is not easily visible and related to the land or the building and which renders the latter unusable.
The problem identified is so important that it considerably reduces the value of the property purchased.
This defect is only perceived during a comprehensive and careful examination of the property.
When detecting a defect, it is so important that the buyer, if he had known about it at the time of the sale, would have questioned the acquisition of the property or would have asked for a price reduction.
Here are 3 classic examples of hidden defects:
In Quebec, hidden defects are in the top 5 of the most common lawsuits.
A hidden defect can be discovered after a month, a year, 10 years, or even 20 years after the purchase of a property.
But how do you know if you are really dealing with a hidden defect?
Let’s see the conditions to be fulfilled!
You don’t claim to have a hidden defect as soon as you notice a problem in your house!
There are a number of criteria to be met in order for a problem to be considered a hidden defect.
In fact, it could be damage that has developed over time since the purchase of the property.
Below are 9 conditions to be considered in determining a hidden defect.
If these conditions are met, then a lawsuit is possible and will probably be won by the buyer.
The first criterion is that a defect must have been identified.
We then define the term “defect” as something which makes the property unfit for the use for which it is intended or which greatly reduces its usefulness.
This is often the case with poor workmanship or construction that has not been done according to industry standards.
The defect must constitute a major problem affecting the building and which would have called into question the will of the buyer to buy the latter.
It cannot just be a minor defect like a poor plumbing connection but one affecting the value of the building if the buyer had known about it.
This is self-explanatory!
A defect which is mentioned to the buyer or which is expressly mentioned during a visit cannot be declared as a “hidden defect” and no appeal can then be brought against the seller.
The buyer must, therefore, not be aware of the existence of the defect at the time of the sale.
The hidden defect must not be apparent, that is, it cannot be seen by a careful and diligent buyer.
The apparent defect, for its part, can be noted by a prudent and diligent buyer without the need to resort to an expert.
The apparent defect cannot be compensated and cannot be considered as a hidden defect.
The defect must therefore be invisible to be able to be compensated.
A buyer cannot declare a defect as hidden if it developed after the sale of the property.
To be considered a hidden defect, the buyer will have to prove that the defect was prior to the sale of the property.
Based on this condition, the seller is therefore only responsible for defects existing when he was the owner.
You may have to sue the seller for a problem that appeared 10 or 20 years ago.
It cannot be a hidden defect if it is due to the deterioration of a building, that is to say, to the normal use and progressive deterioration of a physical component.
For example, a roof with a lifespan of 20 years and which is 20 years old at the time of sale will need to be replaced.
It is not a hidden defect.
The hidden defect must, therefore, be a defect that is not a result of normal deterioration of the building or its components.
The buyer who wishes to sue a seller for hidden defects must provide a written discovery within the appropriate time.
This formality is mandatory and if the notice is not sent on time, there will be no possible recourse for the buyer.
The buyer must then send a letter of formal notice to the seller asking him to repair the defects found within 10 days, except emergencies where the time may be shorter.
This is another compulsory legal formality for an appeal to take place.
The date you bought the building is of no importance whatsoever.
You can be an owner for 2 weeks or 20 years and still file a lawsuit against a seller who sold you a property with a hidden defect.
The law stipulates that you have 3 years, from the date of discovery of the defect, to start a lawsuit against latent defects against the seller.
Once this deadline has passed, you will not be able to continue and your rights will have expired.
NOTE: If these 9 conditions are met, you have a very good chance of winning a lawsuit for hidden defects and obtain compensation. If your seller says that he had no knowledge of the defect and that it appeared when the former owner owned the property, then he will be the one who will have to sue for compensation for the sums he paid you.
A remedy against a hidden defect can be initiated at any time from the moment you notice the presence of the defect.
As mentioned earlier, the date of purchase does not matter.
You have a period of 3 years, from the date of discovery, to sue the seller in order to obtain compensation.
Always refer to the 9 conditions presented above to check if your case is indeed a case of latent defect before taking legal steps.
Sales without legal guarantees have become increasingly popular in Quebec.
It means that a buyer cannot sue a seller in the event of hidden defects unknown to the seller.
Thus, the seller is protected against possible prosecution in the event of defects that were unknown to him.
However, if a seller is aware of a hidden defect and has not mentioned it to the buyer, he can still be prosecuted.
It is therefore not an invincible clause that protects the seller against all risks.
We can never repeat it enough: if a seller knows of a defect and does not mention it to the buyer, he can still be sued even if the buyer had agreed to buy the house without a legal warranty.
Why buy a house sold without a legal warranty?
Well, it’s quite simple!
The seller often gives a 10% discount on the sale price of the property when he asks the buyer to waive the legal warranty.
It’s a big amount!
For a house of $ 300,000, we are talking about a rebate of $ 30,000 which is a significant amount.
However, in the event of an unknown defect, it is the buyer who will handle repairs.
It is also worth noting that real estate agents and brokers cannot generally sell properties without legal guarantees unless it is a repossessed property.
For a buyer, the risk of buying a house with hidden defects is often significant.
Most people wonder how to avoid this risk.
The truth is that it is very difficult to be certain that your home is free from any hidden defect.
However, there is a simple trick that can keep you safe from hidden and visible defects and ensure that you will be compensated.
It only takes hiring a home inspector to do a pre-purchase inspection of your property.
If your inspector misses a detail in his pre-purchase inspection and an apparent defect is detected after the purchase, he will be responsible for compensating you.
If you discover a hidden defect, it will then be the seller’s responsibility to compensate you.
In both cases, you will not have to pay a penny and you will have a possible remedy.
As a buyer, you are therefore never responsible for a hidden defect or an apparent defect and there are remedies that allow you to be compensated.
Are you now feeling reassured?
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