Material Latent Defects
What is a material latent defect?
A material latent defect is a physical defect that is not visible and makes a property:
dangerous or potentially dangerous
unfit to live in
unfit for the buyer’s purpose
These are defects that may not be discoverable during a visual inspection of the property, even by a professional home inspector.
Material latent defects may also include:
- defects that would be very expensive to repair
- when a seller has received a notice from a local government or authority that something about the property must be fixed
- when the seller does not have appropriate building or other permits for the property
Examples of material latent defects
- a seller finished the basement of their house and in the process covered a large crack in the basement wall that affects the structure
- a seller finished the basement of their house, or built an addition or a garage, without the appropriate permits
- a seller knows that whenever it rains, water enters the house
- the home was a former marijuana grow-op and the property hasn’t been remediated. The growing conditions for marijuana create an ideal environment for potentially dangerous mould and mould spores and these may linger and continue to make the property unfit to live in if it hasn’t been remediated
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+ If you are a seller
Sellers cannot hide defects or mislead buyers about the property’s condition or other attributes. You must disclose all material latent defects that you know about.
Your real estate professional must also disclose to buyers any material latent defects they know about. Real estate professionals cannot help hide or disguise material latent defects.
+ If you are a buyer
As a buyer, talk to your real estate professional about any concerns you have. Your representative can give you advice about material latent defects.
Real estate professionals can also help buyers by:
- asking specific questions about things such as the property structure, the roof system, water seepage, the condition of mechanical systems and other equipment, and notices from a local or municipal authority. If Sellers and their representatives decide to answer the questions, they must do so truthfully.
- carefully analyzing the condition of each component of the property
- verifying the condition of a component of the property if you think there may be a problem
- arranging for a professional inspection of the property
- putting conditions on offers (for example, a satisfactory home inspection by a licensed home inspector)
RECA’s Property Inspection Request Form is an excellent tool to use to help buyers assess the condition of the property. Although material latent defects may not be discoverable by a visual inspection of a property, experienced home inspectors have the knowledge and tools to discover the potential for the existence of defects, and may prompt you and your representatives to ask the seller more questions.
If you discover material latent defects after possession, talk with a lawyer about your options.