Legal Word of the Day: Latent Defect

Disrepair and defects

“Latent Defect” — A defect in material, workmanship and so on. A latent defect poses a liability issue if it can be shown that the seller knew about the problem and did not disclose to the buyer.

Defects can be “patent,” or obvious to both vendor and purchaser, or “latent” — not obvious to either the seller or buyer, if they take reasonable steps to inspect.

Absent fraud, mistake or misrepresentation, a purchaser takes an existing property as he finds it, whether it be dilapidated, bug infested or otherwise uninhabitable or deficient in expected amenities, unless he protects himself by contractual terms.”

~ Bora Laskin

This legal issue typically comes up in litigation over the sale of a home. A vendor may be liable to a purchaser with respect to the sale of an existing home if the seller knows of a latent defect that renders the premises unfit for habitation. The purchaser must show that the latent defect was known to the vendor, and that the vendor concealed the defect, or showed a reckless disregard in representing the property.

Unless there is evidence to suggest that the vendor had knowledge of a defect and deliberately failed to disclose it, or hid it from the purchaser, the vendor is not liable for the costs of remedial repairs. The vendor could be found liable, however, if the buyer can show that the vendor knew of a defect and that the problem could not have been discovered by the buyer during a reasonable property inspection.

When it comes to real estate, the law still relies on the maxim: “Caveat emptor, qui ignorare non debuit quod jus alienum emit” — Let the purchaser, who is not to be ignorant of the amount and nature of the interest, exercise proper caution.

Related Cases:

  • Pedlar v McDevitt, 2014 CanLII 23865 Much-read case from Barrie; backed-up sewage pipe water in the bathtub.
  • McGrath v. MacLean et al., 1979 CanLII 1691
    Justices Dubin, Lacourciere and Weatherston review the law around latent defects, and apply the principles to an Ontario Court of Appeal case.

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