Lawyers in Hidden Defects and Real Estate Law

---

Severity

---

Firstly, the defect must be serious. To be qualified as such, it must be so severe that a buyer would not have purchased the property, movable or immovable, or would not have paid such a high price had they been aware of it.

Several aspects must be considered to determine the level of severity of the defect, including:

• The cost of repairs, considering the value of the property
• The reduction in the use and utility of the property
• The loss in value of the property attributable to the defect
• Etc.

---

Hidden/Non-Apparent

---

Next, for the defect to be considered hidden, it must not be visible to the naked eye by a reasonable, prudent, and diligent buyer. Thus, the buyer must have performed his or her duty to inspect the property before the sale and, if necessary, carried out the required checks and expert evaluations if the examination of the property had allowed for the detection of the slightest sign of a hidden defect. Failing to fulfill this obligation of caution and diligence could render the quality guarantee inapplicable.

---

Unknown to the Buyer

---

The defect must also be unknown to the buyer at the time of the sale. Consequently, if the seller informs the buyer of the presence of the defect, it can no longer be qualified as a hidden defect. It is therefore crucial for the seller to denounce any defects he or she is aware of. However, too often, the seller refuses or fails to disclose these defects to the buyer at the time of sale. In addition to being considered a hidden defect covered by the legal warranty, the repercussions stemming from the seller's failure to disclose a known defect could be profoundly serious, as their good faith could be called into question.

---

Pre-Existing to the Sale

---

The defect must have existed prior to the sale. The seller cannot be held liable for defects resulting from the buyer’s misuse or improper maintenance of the property. It is important to recognize that a defect may manifest suddenly or develop over time, even post-sale, while still being pre-existing. Each case is distinct and should be evaluated on its own merits.

Examples of Hidden Defects:

• Accelerated deterioration of a house's foundations
• The presence of tree roots
• Water infiltrations
• The presence of carpenter ants in the house
• The presence of bats in a building
• The presence of rats in a building
• Poor functioning of the French drain
• Malfunctioning septic tank and leaching field
• Certain non-conformities with current regulations

It should be noted that each case is unique. Therefore, we recommend that you make an appointment with one of our lawyers familiar with hidden defects and real estate law so that we can advise you according to your situation. To consult examples of hidden defects, we suggest you consult the annotations of Article 1726 of the Civil Code of Quebec by following this link: https://elois.caij.qc.ca/CCQ-1991/article1726

---

Pre-Purchase Inspection by an Expert or a Building Inspector

---

Contrary to widespread belief, it is not mandatory to use an expert or a building inspector before purchasing a property, such as a building. This has been the case for quite some time. In the past, there was a common perception that for a defect to be considered hidden and thus covered by the legal warranty, a buyer needed to consult an expert or building inspector. However, legally, the classification of a defect as ‘hidden’ has always depended more on its discoverability through reasonable inspection by the buyer, rather than the employment of a professional inspector. Fortunately for buyers, the importance of this distinction is now more widely recognized!

However, if the buyer notices an anomaly during the various visits to the property, they must then resort to the services of an expert or a building inspector, otherwise the detected defect could be qualified as apparent.

Regardless of the situation, it is still recommended to use the services of an expert or a building inspector before purchasing a property to avoid any unpleasant surprises. Moreover, this could assist the buyer in negotiating the sale price downward, if applicable.

---

Buyer Protection Against Latent Defects

---

The Civil Code of Quebec provides for a legal warranty against latent defects in its Article 1726. Indeed, at the time of sale, the seller must guarantee to the buyer that the property and its accessories are free of defects.

A legal warranty refers to a minimum guarantee provided for by law. In other words, the parties (the buyer and the seller) do not need to include this guarantee in the sales contract for it to apply. However, it is a minimum guarantee, and therefore, the parties can provide for additional protections in the contract beyond those provided for in Article 1726 C.c.Q.

It is also important to note that the parties may also reduce this warranty or exclude it completely. However, if the seller knew or could not have been unaware of the defect, the exoneration clause (i.e., exclusion of the legal warranty) will be inoperative. In other words, even if the contract provides that the sale is made without legal warranty, if the seller knew or could not have been unaware of the defect, there could be a question of deceit or fraud, and therefore the legal warranty would still apply.

But as every rule has its exception, it is possible that the legal warranty does not apply despite the seller knowing or being unable to ignore the defect. This is possible if and only if it is mentioned in the contract that the buyer purchases the property at his or her own risk. The seller must also be a non-professional seller to be fully released by this clause.

In any case, deceit in the form of omission, lies, reticence, or fraudulent maneuvering cannot be covered by the clause of sale at the buyer's risk. Therefore, as a seller, one must be careful when aware of a defect but not wishing to mention it to the buyer.

---

Denunciation of the Defect to the Seller

---

As soon as the buyer becomes aware of the existence of a latent defect, they have an obligation to denounce it to the seller. This denunciation aims to inform the seller of the nature of the defect and allow them to see for themselves the existence and extent of the alleged defect. Also, the denunciation should include a mention of the deadline given to the seller to allow them to examine the property. The seller will also have the possibility of conducting or having the repairs carried out by the contractor of their choice, in accordance with the rules of the art, or indemnifying the buyer so that they can execute or have the necessary repairs carried out.

Article 1739 of the Civil Code of Quebec also stipulates that this denunciation must be made in writing. It is always more courteous to call the seller to warn them of the situation, but there is still an obligation to do so in writing. It is therefore common to call the seller to warn them and then send a letter reiterating the same facts as those related during the telephone conversation.

This denunciation must be made within a reasonable time. According to jurisprudence, a period of 6 months could be considered a reasonable delay. However, everything being a question of facts, everything will depend on the circumstances and will vary according to the customs, the nature of the property, and the level of urgency of the defect. In some cases, a denunciation after 6 months has been considered reasonable. It is always preferable to denounce the defect as soon as the buyer becomes aware of it so as not to risk having a denunciation deemed late.

However, once again, there is an exception. If the seller knew or could not have been unaware of the defect, they will not be able to exonerate themselves from responsibility by alleging a late denunciation.

---

Possible Recourses of the Buyer Against the Seller

---

There are several recourses in case of latent defects, but the choice of the appropriate remedy depends, once again, on the circumstances of each case.

For example, here are some recourses:

• Ask the seller to conduct the necessary repairs to rectify the situation
• Request a reduction in the sale price or compensation
• Request a cancellation of the sale (however, courts are more reluctant to grant this, and the burden of proof is therefore more significant)

In the case where the seller knew or could not have been unaware of the defect, the buyer may obtain restitution of the sale price AND damages.

Finally, the seller cannot be held responsible for a loss of the property due to the fault of the buyer or in case of force majeure. In these two cases, the buyer will have to deduct from their claim the value of the property in the state it was in at the time of the loss.

Whatever your situation, it is important to consult a lawyer familiar with real estate and latent defects law to obtain help and legal advice and support throughout the procedures.