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Defects: What, when & how to disclose

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Material Latent Defects

Under common law, the onus is on a buyer to satisfy themselves about the quality of the property being sold. It is the buyer’s job to find out any patent defect, that being one discoverable by a reasonable inspection or reasonable inquiry. A buyer’s realtor® is obligated to disclose all relevant facts which may affect their client’s interest in purchasing or renting a property.

latent defect is the opposite. The courts effectively define a latent defect as one that is not discoverable by a reasonable inspection or inquiry and which makes the property dangerous or uninhabitable. A seller or seller’s realtor® must disclose any known latent defect in writing before an offer is made.

material latent defect means a latent defect that cannot be discerned through a reasonable inspection of the property, including any of the following:

1) a defect that renders the real estate

a) dangerous or potentially dangerous to the occupants

b) unfit for habitation, or

c) unfit for the purpose for which the party is acquiring it, if

i) the party had made this purpose known to the real estate professional, or

ii) the real estate professional has otherwise become aware of this purpose;

2) A defect that would involve great expense to remedy;

3) A circumstance that affects the real estate in respect of which a local government or other local authority has given a notice to the client or the real estate professional indicating that the circumstances must or should be remedied;

4) A lack of appropriate municipal building and other Permits respecting the real estate

A material latent defect that is discoverable by the seller’s realtor®, whether through documentation or a home inspection from a buyer who then does not proceed with the transaction, must also be disclosed to any potential buyers who are considering making an offer.

A licensee is not required to disclose a known material latent defect to a buyer if the seller has already disclosed all known material latent defects in writing to the buyer (ie: in the Property Disclosure Statement).

For more information on this topic, including a full explanation of how this might affect you and your property, click on the following link to register for our upcoming “Why Sellers are Sued” seminar being held February 26, 2022 via Zoom.

Seminars • Couvelier & Associates • Victoria BC Real Estate