Lawyer Bob Aaron wrote an interesting article recently about a home seller’s obligations to disclose house defects to buyers. According to Aaron, the main criterion the courts apply to decide if a seller is responsible for repairs/defects is whether the defects are patent (obvious) or latent (hidden).
Case in point: The buyers of a home in Leduc County, Alberta, inspected the house three times before signing on the dotted line. The only problems they found were minor wiring issues. Soon after they moved in, however, they discovered an infestation of carpenter ants in a bedroom ceiling and mould in the basement.
Because of the ant infestation, the entire roof had to be removed and replaced with a metal one.
But when the buyers took the matter to court, the judge ruled that they’d failed to take reasonable steps to determine the full extent of the defects before buying the home. The buyers would therefore have to bear the repair costs themselves.
“I believe,” wrote the judge, “that the [sellers] were neither subjectively aware as to the existence of the roof defect, nor did they act in a reckless manner in regards to the roof defect.”
However, on the issue of the mould in the basement, the judge ruled that the sellers’ active concealment of the mould together with a false statement about previous water in the basement amounted to fraudulent misrepresentation.
Despite what is commonly knows as “the doctrine of caveat emptor (buyer beware)”, the sellers were ordered to pay the buyers $12,186.45 for drywall repairs.
So – my advice to you as a seller is that you disclose all major defects that a buyer or home inspector may not be able to find on a simple visual inspection.
My experience is that by taking “the high road”, you avoid much higher future repair and legal costs.
Read Other Related Articles:
Are Home Sellers Obligated to Disclose If There Has Been a Death or Violence in Their Home?
What You Don’t Tell the Buyer May Come Back to Haunt You When Selling Your Home.
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