More Caveat Emptor, Latent and Patent Examples #384

By Gerry Neely
B.A. LL.B.

The owners of a house, which was old when they bought it in 1979, sold it in 1994 to buyers who discovered after completion that the kitchen floor sloped 2.5 to five centimetres from one side to the other. The buyers elected not to retain a home inspector, although there were some cracks in the kitchen walls, which they thought were superficial. They claimed a slow foundation settlement was an undisclosed latent defect and sued for damages.

The sellers were used to living in older homes and saw nothing unusual about slightly sloping floors. All doors opened and closed properly, and the slope didn't interfere with their use and enjoyment of the kitchen. They had answered "No" to the Property Disclosure Statement (PDS) question asking whether they were aware of any structural problems.

The judge accepted that the sellers knew nothing of a structural problem, which would likely have been discovered by a qualified home inspector. This was a patent defect and caveat emptor applied, denying the buyers' claim.¹

A buyer sued for damages when he discovered, after closing, that the house he bought sloped 12 inches from the west wall to the east wall, a distance of 48 feet. The buyer's examination of the property was limited, and the contract contained a condition that the offer was subject to an inspection. The slope was neither disclosed by the buyer nor detected by the inspector.

The judge decided the inspector was negligent and liable for damages, but the seller wasn't liable because the slope was a patent defect that didn't have to be disclosed.²

Buyers discovered a strong smell of rotten eggs and seepage came from the septic field of their newly purchased home when they used the toilets, washer and bathtubs. Further investigation revealed the water table was so high that the septic tank couldn't drain properly and sewage backed into it. The sellers had answered "No" to the PDS question asking whether there was a problem with the septic system.

The judge found the sellers must have known the condition of the septic field. It was a latent defect that they should have disclosed. Their misrepresentation entitled the buyers to damages of $15,000 to remedy the problem.³

The owner of a large 50-year-old home, which had been extensively remodelled by previous owners, added a bedroom, bathroom and hallway to a wing. This work was done without a permit and didn't comply with the current building code's minimum height requirements. The buyer only discovered this when the municipality prohibited use of the space and ordered the plumbing removed.

The two representatives who listed and sold the house recognized these rooms didn't comply with the current code. However, from their discussions with the owner they understood the improvements were old and, in their experience, municipalities didn't enforce building codes retroactively.

The judge found the remodelling was a latent defect that the owner should have disclosed, because the work could have been lawful depending on the date of construction.⁴

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