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Hidden Defects in Your New Home: Know Your Rights!

Updated: Feb 12, 2019

After looking for a long time, you finally buy your dream house.  A few months later you notice cracks in the foundation. It's the kind of defect you couldn't have known about it when you bought the building. You find out that it will cost several thousand dollars to fix them. No one mentioned the problem when you bought the house. The problem could be what is called hidden defect.

Whether you buy from a professional seller or someone else, you usually benefit from the warranty against hidden defects. In other words, the law protects you. The warranty against hidden defects, also called the "warranty of quality", applies to the building and to everything attached to it, such as a pool,a chimney,a deck,a garage, or a storage shed. 

What is a "defect"?

A defect is a flaw that affects the quality of a building. It becomes a defect if the flaw is so serious that the buyer might not have bought the property or paid as high a price if she had known about it.

What is "hidden"?

A defect is "hidden" if meets these three requirements:

  1. It is not apparent and cannot be noticed by a simple examination.

  2. The buyer did not know about it.

  3. It existed at the time of the purchase.

The seller is responsible for a hidden defect even if, at the time of the sale, they did not know it existed.

"Apparent" Defects

In general, a seller is not responsible for defects that are apparent. Apparent defects are visible and can be discovered by a simple examination, that is, without the need for an expert's assistance. This kind of examination can take place when the buyer visits the property. The buyer's examination must be attentive and careful.

As a result, a seller will not be responsible for apparent defects such as:

  • apparent defects

  • defects the seller told the buyer about (could be hidden or apparent)

  • defects the buyer knew about or had noticed at the time of the purchase

Sellers Must Tell Buyers About Defects They Know About

Sellers must tell buyers about defects they know about. In other words, they must be transparent.

Sellers cannot do these things:

  • lie to hide the existence of a defect

  • fail to tell the buyer something important to encourage the buyer to buy

  • exaggerate to encourage the buyer to buy on better terms, such as for a higher price

The seller must inform you of the defects so that you can determine how much it will cost to renovate or repair what you are buying. Since some defects can reduce the value of a building, if they're disclosed you can ask for a reduction in the price of the property or negotiate the price.

Buying at Your Own Risk

If you buy a building "at your own risk" (or in French "vente sans garantie légale – aux risques et périls de l'acheteur"), this means you accept the condition it is in, whether it has defects of not. If this kind of sentence is in the purchase agreement or if you buy something sold under judicial authority (following a court decision or court order), you don't have any protection against hidden defects! You are buying the building as-is, including its defects.

However, if you bought a building from a professional seller (also called a specialized seller) such as an individual who earns his living from selling real estate on a regular basis or a seller who also built the building, the seller cannot sell it to you at our own risk and without a warranty: the seller must guarantee the quality of the building.

Careful! When a real estate broker acts as a go-between between a seller and buyer, the broker is not a professional seller.

Inspect the Building Before Buying

You are not required to hire an expert to inspect the building before you buy it. However, the law says any defects that you could have seen if you were a careful buyer are not guaranteed. In other words, if you don't do an inspection, or don't do it carefully,the law says that you accept any defects and the cost of fixing them.

Here is what it means to be a "careful" buyer:

  • Do a visual inspection of the building.

  • Be attentive to any clues that indicate a defect.

  • Act like a careful buyer in the circumstances. This could mean that, if you suspect a defect, you arrange for a more detailed inspection by an expert.

Although it is not mandatory, it is highly recommended to have an inspection done by a certified building inspector. These inspectors usually have the ability to do a careful inspection, spot any defects and, if there seems to be something serious, refer the buyer to other kinds of experts.

Remedies for the Buyer

Depending on the situation, the warranty against hidden defects gives the buyer these rights, among others:

  • a reduction in the price paid

  • reimbursement of the cost of repairs done or that must be done to repair the defect

  • in some cases, reimbursement for harm suffered

  • cancellation of the purchase, return of the building to the seller and a reimbursement of the purchase price

What can you do if you discover a hidden defect?

Here are the main steps to follow if you find a hidden defect:

1. Notify the seller in writing that you discovered a defect.

This notice must be sent within a reasonable time frame of discovering the defect.

Careful! What is "reasonable" depends on the circumstances. It depend on how long it took identify the defect and find out how serious it is. But as a general rule, a reasonable time frame can be up to a year, but EARLIER THE BETTER!

If you don't want to have to pay for the repairs, don't start the work yourself. The seller has to have a chance to

see the defect and how serious it is,  see the damage the defect caused, and repair the defect or replace the defective piece.  However, the buyer can to urgent repairs if the defect is creating a danger or there is a risk of serious damage or loss of the building.

Note: It is also possible to send a "demand letter" directly to the seller, instead of a notice. The demand letter must include, among other things, a description of the hidden defect, a request that the seller respect the guarantee against hidden defects, any conditions you are requesting, and the deadline for answering the letter.  You must send a demand letter before taking legal action in the courts.

2. Reach an agreement with the seller.

It is a good idea to put any agreement in writing. This agreement is a contract between you and the seller. It must be respected.

3. As a last resort, you can take legal action against the seller.

You should keep in mind that you have three years from the time you discover the hidden defect to take legal action, not three years from the time of purchase of the building.

In all cases, it is a good idea to check with a lawyer to protect your rights and to see what can be done.

Important ! This article explains in a general way the law that applies in Quebec. This article is not a legal opinion or legal advice. To find out the specific rules for your situation, consult a lawyer or notary.

Read more on Hidden Defects in Buildings

Educate more on your rights as a home owner on educaloi.qc.ca

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