Selling a home comes with legal responsibilities, especially when it comes to disclosing property defects. Understanding the difference between patent defects and latent defects can help sellers avoid legal trouble and ensure a smooth transaction.

In this blog, we will discuss these key concepts and explain your obligations under Canadian Real Estate Law. We’ll also shed some light on what you have to disclose when selling a house in Ontario.

Do you want to stay informed with what’s happening in Simcoe County real estate? Get the latest news and early access to our listings by subscribing to our newsletter right here.

What Is a Latent Defect?

A latent defect is a hidden issue that is not easily detectable during the course of a normal and reasonably competent home inspection. These defects are most often concealed and not easily detected. They may not be discovered until after the sale is completed and you are living in the home. Sometimes, seasonality and weather conditions can reveal some issues here.

Examples can include, but are not exclusive to:

• Leaking roof covered by drywall
• Faulty wiring behind walls
• A cracked foundation concealed by flooring
• Seasonal water penetration into the building envelope from runoff
• Ice damming stemming from insufficient insulation in an area of the attic space

Since latent defects are not obvious, sellers have a legal duty to disclose them. Failure to do so could result in lawsuits for misrepresentation or fraud. Another latent defect could be stemming from buying a house during a season where a certain appliance cannot be tested. Examples include an air conditioner in the winter or a furnace in the summer.

---

Looking for some ideas on how to sell your home in Barrie or Simcoe County? The posts below can help:

• 5 Tips For Selling A Waterfront Home
• Should You Stage Your Home Before Selling?
• Should You Sell the House During a Divorce?

---

What Is a Patent Defect?

A patent defect is a visible or obvious issue that a buyer (or home inspector) can easily identify in a walk through the home. Examples can include, but are not exclusive to:

• Cracked windows
• Missing roof shingles
• Flashing, unstable railings
• Overload areas in an electrical panel

Buyers are expected to notice these defects, so sellers generally are not liable for them after the sale. Especially if the house is sold as is, which is the case in estate sales or rental properties. However, sellers must still act in good faith and not actively conceal issues.

Sellers are typically not responsible for patent defects after a sale, as buyers are expected to identify such flaws. This is especially true in “as-is” sales, like estate sales or rental properties. Despite this, sellers are obligated to operate in good faith and cannot actively hide any issues.

How Long Are You Liable After Selling a House in Canada?

So, how long after you buy a house can you sue the seller? In Canada, liability for latent defects varies by province, but generally, a buyer can sue for up to two years from the discovery of the defect.

This can vary with what a judge deems as a reasonable period to discover the defect in reasonable use and also on whether the issue was a preexisting but at the time, unverifiable issue.

If the seller knowingly concealed a major issue, like mold or structural damage, the limitation period could extend under fraud claims. For patent defects, buyers have little recourse since these issues were visible at the time of purchase.

Courts typically rule that buyers should have noticed them during inspections. Again, if you can’t check an air conditioner during the winter and it malfunctions in the summer, a judge could allow this. But if it was an older compressor that failed, you may only get a prorated amount in recompense.

What If You Bought a House With Problems Not Disclosed (Canada)?

If you purchase a home and later discover undisclosed latent defects, you may have legal grounds to sue the seller for damages or even rescission of the sale. Key factors that courts consider are:

• Was the defect material to the home significantly affecting value or safety?
• Did the seller knowingly hide the issue?
• Could the buyer have reasonably discovered it during inspections?

In Ontario, sellers must disclose known latent defects under the Real Estate and Business Brokers Act (REBBA). Failure to do so can result in legal action, EVEN IF, the property is being sold as is.

---

Are you planning to buy a house in Barrie? The posts below can guide you through the process:

• 5 Tips When Buying A Waterfront Home
• Why Buy a Home in Snow Valley?
• What Does Barrie Real Estate Offer Home Buyers?

---

Do Sellers Have to Disclose a Stigma?

The laws can vary by province but in Ontario and most provinces sellers do not have to voluntarily disclose stigmas unless asked directly. However, most responsible real estate agents may have an ethical obligation to answer honestly if questioned.

Suppose a buyer later discovers an undisclosed stigma, such as a violent crime occurring in the home, and feels deceived. In that case, they may argue that there was misrepresentation, but success will be difficult and will depend on whether they were lied to or misled. Stigmas are not regarded as defects, but sellers should be cautious. Honesty is the best policy.

Whether you are a buyer or a seller, understanding patent defect versus latent defect is crucial in real estate transactions. Is the seller responsible for any repairs after closing? The short answer is, yes, they can be. But as always, it depends on the situation. When in doubt, consult with a local real estate team before buying or selling a home.

Working with an experienced real estate team offers the highest level of protection when buying or selling a home. To learn more, connect with our Barrie real estate agents today at 705.305.4174 or email hello@weeksgroup.ca.