Latent Defects

Gladu v Robineau, 2017 ONSC 37 (CanLII)

[292] The distinction between patent and latent defects is described in Halsbury’s Laws of England, at para. 51: Defects of quality may be either patent or latent. Patent defects are such as are discoverable by inspection and ordinary vigilance on the part of a purchaser, and latent defects are such as would not be revealed by any inquiry which a purchaser is in a position to make before entering into the contract for purchase.

[293] A home inspection is not intended to find latent defects. At para. 76 of Lyle v. Burdess, 2008 YKSM 5 (CanLII), Cozens Terr. Ct. J. agreed with the comments of Killeen J. in Kaufmann v. Gibson (2007), 59 R.P.R. (4th) 293 (Ont. S.C.), stating:

In circumstances where there is no [Property Disclosure Statement] prepared, a prudent purchaser would be expected to contract for a more thorough home inspection if the buyer wished to avoid future costly surprises. Where a PDS has been prepared, however, the buyer should be able to rely on the truthfulness and accuracy of the representations in the PDS in deciding the extent to which a contractor will be instructed to conduct a home inspection.

Robb-Sim v Solomes, 2013 CanLII 41925 (ON SCSM)

DEFECTS AND QUANTIFICATION OF DAMAGE

14. At the trial the plaintiff and her home inspector described the following defects in the property:

a. Heaving, warping and separating of the hardwood floors,

b. Water leaking into the basement,

c. Foundation cracks,

d. Cracked ceramic tiles,

e. Side door below level of driveway,

f. Improper grading around house generally, and the window wells specifically,

g. Lifting of flashing at peak of roof,

h. Deficient bridging of joists in basement, and

i. A window installed sideways.

16. The following issues are to be determined at trial:

i.) Did the defendants conceal patent defects in the property?

ii.) Were the defendants aware of latent defects in the property which they failed to disclose?

iii.) Did the defendants misrepresent the condition of the property prior to sale?

iv.) What duty was owed to the purchaser by the listing agent and did she breach it? This issue will require determination of whether the listing agent owes a different duty than the brokerage or the buyer’s agent.

v.) What damages did the plaintiff suffer?

21. The legal maxim “Buyer Beware” applies to real estate transactions. It is the buyer’s responsibility to examine the property and discover patent defects. Patent defects are those that are discoverable by a reasonably prudent buyer without disrupting the property. A vendor has no obligation to bring patent defects to the attention of a buyer but must not take steps to deliberately conceal them. A professional home inspection should reveal any patent defects and a purchaser would be “foolish not to take advantage of the inspection clause”. See Krawchuk v. Scherbak 2011 ONCA 352, para 86, 89.

25. Latent defects are not usually discoverable by a prudent buyer making an ordinary inspection of the property because they are hidden behind or beneath immoveable surfaces in the home. Being that latent defects are not visible during ordinary inspection, a vendor may not be aware of their existence either. However, if a vendor is aware of such defects he or she must disclose them to the buyer. See Cotton v. Monahan, (2010) ONSC 1644, 2010 ONSC 1644 (CanLII), 93 R.P.R. (4th) 212, para 42 -50 citing McGrath v. McLean, 1979 CanLII 1691 (ON CA), 95 DL.R. (3d) 144 (Ont. C.A.). Vendor liability arises from failure to disclose know latent defects and the standard for disclosure is what a reasonable person in similar circumstances would have disclosed. See Krawchuk v. Scherbak para 80. There is no vendor liability for unknown latent defects or for defects that develop after the closing. A home inspection is not intended to find latent defects but is intended to more thoroughly investigate any latent defect disclosed to the buyer in order to determine its nature. See Krawchuk v. Scherbak 2011 ONCA 352, para 89.