Legally speaking – I just found out that my house has latent defects; what to do now?

Legally speaking – I just found out that my house has latent defects; what to do now?

Here is the third in a series of legal columns by Quebec law firm  Joli-Cœur Lacasse Avocats.

By Simon Bégin, eng., lawyer at Joli-Coeur Lacasse

bégin_simonCongratulations!! You did your homework, separated your true needs from your long time wishes and made your pick on your new living quarters. You’ve negotiated the price, had a home inspection done, went to the notary, and now it’s time to move in!

But now that your boxes are unpacked, you realize that the new house you bought has a funny, well… in fact, a not so funny… something…

After trying to talk yourself through it, you have to come to the conclusion that it’s not you: your house really does have a problem. Could this be a latent defect?

You have to know that when an owner sells his house, unless specifically withdrawing that guarantee in writing, in the deed of sale, the Civil Code provides that the seller automatically guarantees that his house is free from any latent defects.

A latent defect is a legal concept. Not all hidden defects are to be considered latent defects in law, leading to legal consequences. Your lawyer is the professional able to determine if a hidden defect qualifies, in your situation, as a latent defect. Conditions 3 and 4, below, are usually the most critical to assess in making that legal determination.

Briefly, a latent defect is one that:
(1) the buyer did not know of;
(2) already existed (either in current or in latent state) at the time of the purchase (either known or unknown to the seller);
(3) is serious enough so that it renders the property purchased improper for its intended use, or significantly diminishes its utility to such an extent that the buyer wouldn’t have bought, or wouldn’t have given the price paid, had he known the existence of the defect, and;
(4) that’s “hidden”, in the sense that it is not something that could have been discovered by the buyer upon performing a diligent, yet non-expert, inspection.

If your house is affected by a latent defect, there are steps to be taken in order to properly address the situation and preserve your rights.

First of all: Do not panic. It’s not time to start ripping down the house right away and proceed with corrective action. Unless there’s an emergency forcing you to act immediately (a safety issue, for example), or a specific situation that could worsen if nothing was done without delay, you shouldn’t proceed with any work without first advising the seller of the situation, by written notice, provided within a reasonable delay from your discovery. And it’s a good idea to get a proof of receipt.

Your written notice should sufficiently advise the seller of the situation so that he knows of the latent defect found and the corrective actions sought, allowing him to assess their importance and cost. You should grant the seller a real opportunity to come and see (or send an expert), allowing him to offer a solution.

To proceed with corrective action without first advising the seller in writing could result in you having no recourse at all. So the written notice is not something to be taken lightly, as optional.

You’ve granted a certain delay, after the receipt of your notice, but he neglected to respond? You can have your own tradesmen proceed with an estimate of the corrective work and then put the seller in default, in writing, of doing the work that’s listed within a reasonable delay, or else that you’ll proceed with having the work done and claim for the money.

Still got no news from the seller? You can proceed with corrective actions, and file a law suit. Careful though: you have three years from your knowledge of the existence of the latent defect to initiate your claim in court. Past that delay, you right to sue could be lost forever.

Technically, the money you can claim is a price reduction corresponding to the difference in value between what the house was really worth (with the latent defect), and the price you paid. It is not simply the cost of the corrective action required. For example, the cost of the new ceramic tiles to replace the old flooring in the kitchen (while you’re at it) may well not be fully recoverable from the seller. Only the difference in the value of the whole house that results from the existence of the latent defect can be recovered.

In all cases however, if the seller acted in bad faith, in the sense that he knew or is presumed by law to have known of the latent defect, then you’re entitled to claim for your other damages arising from the whole situation, on top of your claim for the difference in value. This means that you could also claim for your expenses for temporary relocation, for example, or your expert’s fees to assess the situation, or for lost salary for the time you had to take off to manage the situation, etc…

If the latent defect is significant enough, you can choose, instead, to request the resolution of the sale, to turn the house back to the seller (without first going through corrective work) and get a reimbursement of the full price paid. Again, it’s either something that can be claimed alone, or along with other damages, when the seller knew or is presumed to have known of the defect.

If the two parties are willing to act reasonably, many situations can be dealt with without having to go to trial, thus saving both parties’ time, stress, and expenses associated with this process, and leaving more energy and money to cure the problem rapidly and get on with their lives. But you should always seek legal support right from the beginning, as the road to a satisfactory resolution can always be a tricky one!

(The above is intended for informative purposes only, and does not constitute nor replace a legal opinion for your specific case).

The masculine form is used merely to simplify the text. No discrimination is intended.

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Categories: Opinion

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Jolicoeur Lacasse Avocats

Notre cabinet qui regroupe une centaine d'avocats présents à Québec, Trois-Rivières et Montréal, est reconnu pour offrir, à des coûts avantageux, des services juridiques efficaces et efficients. Nos professionnels sont compétents, imaginatifs et désireux de vous permettre d’atteindre vos objectifs dans un environnement de partenariat et de convivialité. Ils sont en mesure d’identifier et d’anticiper vos besoins et, le moment venu, ils sauront agir de manière proactive et entamer des démarches novatrices et sécurisantes, afin de vous offrir un service adapté à votre réalité.

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