Latent Defects in Co-ownerships: Can They Be Avoided?

Buying a co-ownership property is a big deal! It’s exciting to move into a new home and start making the place your own for your happily ever after. Unfortunately, this purchase can quickly turn into a nightmare if you discover a latent defect in the building after moving in. That’s why it’s important to take certain precautions before buying your co-ownership property. 

What is the legal warranty of quality?

Article 1726 of the Civil Code of Québec provides that the seller is bound to warrant the buyer that the building and its accessories (garage, porch, fireplace, etc.) are free of defects at the time of the sale. Note that even if the seller is not aware of the defect at the time of sale, they are still responsible for it.

The seller and the buyer may, however, in the deed of sale, add to the obligations of legal warranty, diminish its effects, or exclude it altogether. However, in the latter case, the seller is still required to guarantee the quality of the building if they have disclosed the defects of which they were aware or could not have been unaware.[1]

What counts as a latent defect?

For a problem with a building to be defined as a latent defect, it must meet certain criteria, including:

1. The defect must be hidden, i.e., it must be unknown to the buyer at the time of sale and must not be detected by the buyer during their inspection of the building.

2. The defect must be sufficiently serious, meaning if it had been known, the buyer would not have bought the property or would have asked for a reduction in the selling price.

3. The defect must exist at the time of sale.

In addition, the buyer must have acted with prudence and diligence in inspecting the building before making the purchase. The buyer is required to make a careful visual inspection of the building and, if there is evidence of potential defects, enlist the services of a qualified inspector.

How does your broker help you act as a prudent and diligent buyer?

Your broker has a duty to advise and inform you throughout the transaction process. These obligations include taking steps to determine any factors which could unfavourably affect the property in question.

To identify these unfavourable factors, the seller’s broker must complete a mandatory form with the seller called the “Declarations by the Seller of the Immovable” in which the seller must declare everything they know about their property. This includes the land (soil), basement and foundation, plumbing and electrical, roofing, past inspection reports, etc. This form is also where the seller must report incidents that have occurred in the building, such as water damage or infiltrations, structural and foundation problems, or a fire. These declarations give the seller the opportunity to indicate what repairs or corrections have been made to the building, so as to reassure the buyer. The “Declarations by the Seller of the Immovable” form must be provided to the buyer and their building inspector.

The use of this form not only provides the buyer with a detailed picture of the property but also reduces the seller’s risk of being targeted for legal action concerning latent defects.

Your broker is also required to recommend that you have the private unit and common areas of the building inspected by a qualified professional or building inspector.[2] Your broker can provide you with a list of such professionals or inspectors. Note that according to the Association des professionnels de la construction et de l’habitation du Québec, the average age of co-ownership housing stock in Quebec is 29 years.[3] With an aging housing stock, it is all the more important to be extra cautious when inspecting a property for purchase.

What should I do if I discover a latent defect?

Even when you take precautions as a prudent and diligent buyer before purchasing your co-ownership property, you may still discover defects that no one could have known existed.

While your broker might acknowledge the issue alongside you, their work must remain confined to real estate brokerage. Your broker is therefore not authorized to provide legal advice or draft a formal notice or demand letter. However, they can direct you to reliable sources of information and competent professionals who can offer guidance and advice on your next steps.

Why do business with a broker affiliated with RE/MAX’s Coproprié-T?

RE/MAX is a network of real estate brokers specializing in the sale, purchase and rental of divided co-ownerships throughout Québec. These professionals are able to obtain and review all documentation relevant to the property for sale and advise you accordingly. Brokers affiliated with RE/MAX’s Coproprié-T program have access to an exclusive training program called Coproprié-T, which has been specially designed for co-ownership. This training allows them to maintain high quality service standards for transactions involving divided co-ownerships.

Good to know! Looking for the assistance of a qualified professional for buying or selling your co-ownership? Look for a broker affiliated with the Coproprié-T program on the RE/MAX website! https://www.remax-quebec.com/en/real-estate-brokers

Good to know! Want to talk to a lawyer after finding a problem on your property, but worried about the expense? Look for the Tranquilli-T logo in the profile of the RE/MAX Coproprié-T affiliate broker to benefit from the program and its legal assistance and small claims management features, which all participating RE/MAX brokers offer free of charge. This legal assistance gives you unlimited access to consultation with an experienced lawyer about latent defects for up to 18 months after signing the bill of sale.