AdvocateDaily Staff

(Contributor)

Homebuyers who only discover defects in their new property

Homebuyers who only discover defects in their new property after closing the deal may still be able to sue the vendors, says Ottawa paralegal Amri Murray. Murray, principal of AJ Murray Legal Services, tells AdvocateDaily.com that she expects a flurry of cases to arise each fall as homebuyers move in following the peak deal-closing months of the summer, only to uncover previously hidden faults in their new properties.

But not all claims are guaranteed to succeed, she says, explaining that courts will be guided by one of the oldest legal principles around: caveat emptor, or “let the buyer beware.”

It’s your responsibility as the buyer to do your due diligence, Murray says.

“If there’s a huge visible crack in the wall or some significant problem that you could — or should — have easily discovered by simply taking the time to really look at the property before buying it, then the lawsuit is likely to go against you.

For that reason, she says it’s crucial for buyers to hire a good home inspector to do a thorough check of the premises before committing to any purchase.

Don’t just go for the cheapest person. Make sure it’s someone who is experienced, understands the role, and can pick up any problem that is discoverable.

The situation changes when the disputed problem can be described as a “latent defect” or one that a competent inspection could reasonably have missed, says Murray.

Without an agreement between the parties covering latent defects, she says buyers will usually only succeed in court if they can show that the seller was either responsible for the problem, or they failed to disclose the issue to the purchaser, despite knowing about it in advance.

If it was not possible for the seller to foresee the defect, then that’s something that could go against any lawsuit , Murray says.

She says alleged misrepresentations by sellers, which could expose them to liability, fall into two camps: negligent misrepresentations, which could be put down to carelessness, and more serious fraudulent misrepresentations, which involve deliberate deception on the part of a vendor.

The threshold for proving fraudulent misrepresentation is higher and more difficult to meet , Murray says.

She says the nature of the cases makes them a good candidate for small claims court since the cost to repair many defects falls within its $25,000 limit. “On occasion, it can go over that amount, depending on how serious the problem is,” Murray says.

But she says courts at any level will not entertain claims that are not “material” to the contract between the parties.

I’ve had people call me to see what their options were because a room was painted the wrong colour, and I have to tell them it’s not serious enough. It has to be material to the purchase. Murray says.

In general, the more time that passes between a sale and a lawsuit, the smaller the chance of success, Murray says.

“In one instance, a person was trying to sue over a defect 10 years after they bought the house. With that kind of interval, the seller will have a stronger argument that the defect is attributable to expected wear and tear ,” she says.