What is your Guarantee in Case of a Hidden Defect?

17 May 2019 by National Bank
Hidden Defect

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.

What is a hidden defect?

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.

Hidden or visible defect?

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.

What are the most common hidden defects?

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.

What to do in case of a hidden defect

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.

Tags :
Back
Terms of use
National Bank’s virtual assistant

When using our Virtual Assistant Service (the "Chatbot"), you accept these Terms of Use, which are subject to change without notice. Furthermore, you agree to consult these Terms of Use from time to time and acknowledge that your continuing use of the Chatbot means that you have accepted any changes that may have been made. Your continued use of the Chatbot means that you’ve read, understand and agree to these Terms of Use, the Terms of Use for our website, our Online transaction services, and to our privacy policy. You also understand any other agreements that you have with us will continue to apply when you use the Chatbot.

1. Our Services and your responsibilities

The Chatbot is an automated service which is integrated into our online banking platform.

The Chatbot is preprogrammed to answer general questions concerning the use of our online banking platform solely for informational purposes. The Chatbot is not able to answer questions on personal monetary transactions or products you hold with us.

By using the Chatbot, you understand and agree that:

  • The Chatbot does not provide financial advice or financial planning services.
  • The Chatbot does not conduct any banking transactions.
  • The Chatbot may not be able to answer all your questions. Therefore, it may not be able to provide you with the information you require. You must judge whether the answer provided responds to your question accurately. In the case of uncertainty, a customer service representative would be happy to help you. You can call us toll free at 1-888-483-5628 or 514-394-5555.
  • The Chatbot is not a complaint service. You cannot use the Chatbot to file complaints. If you have any complaints, you can contact us at the number indicated above.
  • We monitor, record and store the discussion that you have with the Chatbot to improve our interactions with our clients.
  • You will not provide the Chatbot with any confidential, personal, or private information. For example, you will not provide the Chatbot with your login information, PIN or other personal banking information.

2. Limitation of Liability

You acknowledge that we won’t be liable for any losses or damages that you may suffer as a result of your use of the Chatbot, including if the Chatbot is unavailable for any reason.

We cannot guarantee that the results obtained via the Chatbot will be accurate and reliable and that the answers provided will meet your expectations.

We will not be held liable for damages you incur as a result of:

  • Any delay, error, interruption or omission on our part or any other event beyond our control.
  • Any deficiency or technical error or any unavailability of our systems and wireless networks.
  • Your failure to meet any of your obligations.
  • Any amendment to or suspension, refusal or blockage of the Chatbot.
  • Any decision or measure you take in response to information and data obtained via the Chatbot.
  • Any other damages you may incur that are not caused by negligence on our part.

3. Language

You have requested that these Terms of Use, and related documents be drawn up in English.

4. Governing Law

These Terms of Use are governed and must be interpreted in accordance with the laws in force in the province or territory where you reside. If you reside outside Canada, the laws in force and the courts of competent jurisdiction are those of the province of Quebec.

Virtual assistant