Selling a property through Realtors in most places in North America including in British Columbia, requires a sellers Property Disclosure Statement.
The form British Columbia Realtors use contains, amongst many other revealing questions, a clause which reads as follows. “Are you aware of any material latent defect as defined in Real Estate Council of British Columbia Rule 5-13(1)(a)(i) or Rule 5-13(1)(a)(ii) in respect of the Property or Unit”. Rule 5-13 is explained as “Material latent defect that cannot be discerned through a reasonable inspection of the property, including any of the following:
a defect that renders the real estate,
Dangerous or potentially dangerous to the occupants
Unfit for habitation”
Bottom line, if you are a seller and you fail to inform a buyer about any defects in the home or property you are selling, you could wind up in court. If you think the age old rule of caveat emptor (let the buyer beware) still protects you, please know that it may not in the case of a latent defect. It is only useful for patent defects which I will explain in my next article which is to be published February 21st, 2010.
A few examples of latent defects would be perhaps a missing vapor barrier in the walls or ceiling, blocked drains, insufficient ventilation or the like. Buyers are expected to “reasonably inspect” what they are buying. This would reveal patent defects but not necessarily latent defects. Private buyers especially should be aware of this. Realtors will have a Property Disclosure Statement filled out and signed by the sellers. But, with private sellers you don’t automatically get that same protection.
Home Inspections are always important. I recommend them to every buyer as do most, if not all Realtors. But if you’re buying privately, it’s that much more important. Private buyers would be well advised to obtain a written statement from a seller, either getting the seller to reveal any defects or stating that there are none, whichever is appropriate.
Whether buying privately, or with the helping hand of your favorite Realtor, you want to be sure that the Property Disclosure Statement, or written statement from the seller are incorporated into and form part of the contract of purchase and sale. Doing it that way gives you as a buyer, a greater ability to have recourse against the seller, should you discover that knowledge of latent defects has been withheld from you.