The legal warranty: Protection against hidden defects
Some people have nightmares about hidden defects. But a better understanding of the legal warranty could help make sure they get a good night’s sleep. Above all, it means buyers can look for their dream home with peace of mind.
Under the Civil Code of Quebec, the legal warranty provides buyers with protection against hidden defects, i.e., a fault or problem in the property that wasn’t discovered at the time of the sale. This warranty exists under the law, so it doesn’t have to be included in the offer to purchase.
However, the legal warranty does not apply to problems known to the buyer or ones that a “prudent and diligent” person would have discovered.
Two levels of protection
The legal warranty has two components: the warranty of quality and the warranty of ownership. The first one relates to hidden defects; the second, to title defects. The warranty of ownership is useful, for example, in making sure that a property bought is free from prior mortgages and that the buyer is aware of any charges affecting the building, such as rights of way (servitudes).
This verification is done by the notary handling the transaction. As an expert in real estate law, the notary is the best person to answer any specific questions about the legal warranty and its implications.
The Seller’s Declaration
Whether or not owners sell with a broker, they must be transparent and inform buyers of any defects that render the property unfit for its intended use or diminish its value.
On the whole, the Seller’s Declaration is an excellent way of finding out the property’s condition. This document is prepared by the owners to the best of their knowledge, and any problems declared in it cannot be considered as hidden defects, as they are known to the buyer.
It is in buyers’ interest to read this document before making an offer to purchase. It will save them unnecessary costs and make sure they’re not surprised by a problem that was declared and would have prevented them from buying the property.
The inspection report
Getting a building inspected by a professional is highly recommended when buying a new home. The inspection report validates a property’s condition and helps buyers decide whether to buy it at the price set out in the offer to purchase, withdraw their offer or propose an amendment.
What if the inspector says the roof is deteriorating and needs urgent repairs? It would be difficult for the buyer to then take legal action against the owner, since the owner would have known about the problem when the transaction was completed. On the other hand, mould behind the walls would be considered a hidden defect.
Lastly, be sure to include the inspection condition in a promise to purchase!