Nov 8, 2023
Problems after taking possession of a new home can be a homeowner’s worst nightmare. From flooding basements to concealed defects, these issues can leave you wondering if you can take legal action against the seller. In this article, we will explore the challenges of dealing with problems that arise both at the time of possession and those discovered after you’ve moved in.
Imagine purchasing your dream home, only to be greeted by a flooded basement in your first spring. You soon discover that the same issue had occurred with the previous owner. Your home inspection didn’t reveal any plumbing or electrical defects or signs of water damage, and neither the seller nor the realtor disclosed any issues. The big question is, can you sue the seller?
In Alberta, the seller is obligated to disclose any known Material Latent Defects, which are defects not discoverable through reasonable inspection but can affect the property’s use or value. To sue for a breach of this contractual term, you need to prove several factors, including the existence of a defect, its latent nature, the seller’s knowledge or concealment, the defect’s impact on safety or habitability, and your reliance on the misrepresentation.
However, making a successful case can be challenging. Proving the seller’s awareness of the defect and their concealment of it is particularly difficult. Evidence from previous owners or neighbors can be crucial in demonstrating the seller’s knowledge of the problem.
Another option for buyers is to pursue an action in tort, specifically for negligent or fraudulent misrepresentation. For a negligent misrepresentation claim, there must be an existing duty of care between the parties, along with other elements like untrue statements and actual damages. For fraudulent misrepresentation, you must show that the seller knowingly made untrue statements or deliberately concealed information.
Steps You Can Take:
Issues that surface immediately upon possession are a different challenge. Unlike latent defects, these problems become apparent as soon as you move in. In Alberta real estate transactions, you gain possession of the property only after the seller has received the purchase price. Once the funds have been transferred to the seller, the transaction is irreversible.
Types of Issues:
If a problem arises at the time of possession, the seller is responsible for addressing it, even if it involves matters like flooding. However, if the seller is uncooperative or improperly insured, you may need to take legal action against them for breaching the contract.
Before suing the seller, consider the financial implications. Legal action can be costly, and you may need to invest time and resources in building your case. Weigh the potential recovery against the expenses of pursuing legal action.
Discovering issues with a property after closing can be frustrating. If you believe the seller was aware of these problems, you might consider taking legal action. However, it’s essential to be prepared for the associated costs and complexities.
While a professional inspection company may have evaluated the property, their liability is often restricted by the contract. It’s crucial to understand the terms of your agreement with the inspection company.
Well, If the Home Inspector Is Not Responsible, Shouldn’t the Seller Be?
In real estate, the principle of “caveat emptor” (buyer beware) remains prevalent, meaning buyers must exercise caution and conduct due diligence. The seller’s obligations are typically limited to what is explicitly stated in the contract. If you require assurance regarding specific aspects of the property, consider obtaining a seller sign-off or separate schedule.
Exceptions to the caveat emptor rule exist, mainly for latent defects or latent dangers. However, pursuing legal action can be complex, and you must prove that the seller concealed or caused the issue.
Problems after possession can be a daunting experience for homeowners. While legal recourse is available in certain circumstances, it’s essential to understand the complexities and costs involved in taking legal action against the seller. Additionally, buyers should be vigilant in their due diligence and consider all available options before moving forward with a lawsuit.
Hi! I’m Erin Crocker. I’m a real estate lawyer with over 10 years of experience in Alberta and British Columbia real estate law. I love technology and efficiency. I’m on a mission to create a modern, digital closing experience for buyers and sellers through technology, transparency and sharing knowledge.
