Expanding the Meaning of Latent Defect
A latent defect is a defect in a property you are buying or selling that cannot be detected through a reasonable but thorough inspection of the property. That’s not a perfect definition, but good enough for this article. A hole in the wall behind a door or damaged shingles on a roof are not latent defects because if you look carefully when inspecting the property, you will find them. A cracked foundation behind drywall in the basement is likely latent because you cannot reasonably remove the drywall in the course of an inspection. A seller has the legal obligation to disclose latent defects to a buyer … but only if the seller knows about them. If the seller doesn’t know about the cracked foundation, then the buyer has no remedy against them if and when they later discover it.
There are now cases going on where people are attempting to expand that legal concept. Whether it will succeed is unknown. For example, what if you purchased a property with a convicted pedophile next door. The seller knew about it but didn’t tell you. It may have even been motivation for the seller to move. This is not a latent defect under the traditional existing definition. However, what other remedy do you as a buyer have? The costs to proceed through trial could be very expensive. The odds are perhaps against you. On the other hand, the law is constantly evolving. It will be interesting to see how this argument eventually turns out. Remember that even if the original trial court agrees and finds liability on the part of the vendor for failing to disclose this information, an appeal court can overturn it. In them meantime, as a buyer …. ask more questions about the property you are about to purchase and the surrounding neighbourhood. Consider asking if the seller has any material information about the neighbourhood that affects the property. Also be prepared that a seller may refuse to answer such a vague and loaded question.