Discovering a hidden defect is many new homeowners’ biggest fear. The same goes for sellers, who are often worried the buyers will seek action against them. Here’s what you should know about hidden defects and what you should do if you think you have discovered one.
A hidden defect is a defect that is not noticeable at first glance. A simple visual assessment, as is done during a pre-purchase inspection, does not reveal a hidden defect.
Hidden defects also describe a significant defect that diminishes the quality of a house or condo, which prevents the owner from fully enjoying the property. The defect is so significant that the buyer, had they known about it, would probably have cancelled their purchase promise or negotiated for a lower price.
Even if the hidden defect was unknown to the buyer, it still existed at the time of purchase. On the other hand, even if the hidden defect was unknown to the seller, they are still the sole responsible party.
If the seller mentioned existing defects to the buyer, or if the defects are clearly apparent, i.e. visible during a rigorous pre-purchase inspection, then the seller is generally not responsible.
However, keep in mind that not all inspectors offer the same level of expertise, and that the concept of a hidden defect is quite nuanced. In case of a dispute, a judge will decide whether there were warning signs.
According to Lorraine Talbot, author of La responsabilité de l’inspecteur préachat, obtaining an inspection report “increases the chances of winning a legal case against the seller.” Do not neglect getting a pre-purchase inspection done.
The following are the five most common hidden defects, four of which are related to the unwanted presence of water on the property, according to Gérald Smith, president of Experts Immobiliers Smith & Associés and former president of the National Building Inspectors and Experts Association.
1. Water infiltration in the basement
“The basement becomes damp, there’s mold or noticeable water damage: water has infiltrated the house,” explains Gérald Smith. There are many causes of this inconvenience, ranging from a lack of waterproof foundation to landscaping that does not meet standards. Water infiltration weakens the structure of the house and can also potentially affect the health of its occupants.
2. Foundation in bad condition
The presence of cracks in a concrete foundation is almost inevitable in the long run. But if they spread past the exterior plaster or into the ground, they should be considered serious and a sign of problems to come, since it allows water to infiltrate. The presence of efflorescence, a whitish crystalline deposit at the base of walls, is a sign of moisture problems.
3. Roof leakage problems
Water can also get in through the roof, whether due to faulty construction or poor maintenance. The extent of the damage depends on the number of times infiltration has occurred. Even if the seller says they have taken care of the problem, it’s wise to have a professional verify the quality of the work. In this instance, the rotting of structural elements in the roof or the loss of mineral wool insulation are causes for concern.
4. A French drain that is missing or in bad condition
A poorly working drain is a veritable fast-track to humidity. You therefore need to check for the presence of a drain as well as its condition. The systematic installation of a French drain did not begin until 1954, and it wasn’t until 1970 that plastic drains (which are perform better) became the norm. However, a drain’s efficacy diminishes after 40 years of use, making a cleaning necessary.
5. Structural weaknesses
Whether due to negligence or ignorance, work done on a house can weaken its structure, like a load-bearing wall removed without proper compensation, a hand-dug basement, or a second floor that should never have been built. Checking on the reputation of those who performed major renovations on the building can be a telling sign.
The quality guarantee protects buyers in case of hidden defects. The Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ) specifies that, under such guarantee, the seller assures the buyer that the building is free of existing defects at the time of sale. They confirm that the property does not pose any problems that would render the building uninhabitable or diminish its usefulness to the extent that the buyer would not have bought it or would have negotiated a different price had they been aware of the defect.
This clause is part of every real estate transaction, but it can be elaborated on, edited down or excluded (a sale without legal guarantee) according to the parties’ wishes.
If you are faced with a hidden defect, you must provide written notification to the former owner as soon as possible, and they will then be responsible for assessing the situation, getting the right experts in and correcting the situation. They will proceed with the repair work or reduce the price of the building as a result. An amicable agreement is preferable to avoid high legal fees.
However, since the maximum amount that can be claimed for small claims has increased to $15,000, many cases concerning defects can be taken to Small Claims Court, where people can defend themselves without a lawyer. This allows you to save on legal fees.
If you suspect that the defect should have been identified during the pre-purchase inspection—an important step in the home-buying process—you can also decide to deal with the building inspector. Working with a certified inspector or a member of a professional order who holds reliable professional insurance ensures that you will be able to claim your money if they are found responsible.
Finally, by knowing what a hidden defect is and understanding the proper measures to take, if you find one in your home, you can quickly remedy the situation. You’ll then be able to start enjoying your home again.
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