Material Latent Defects

Purpose:  This bulletin describes material latent defects in a seller’s property you must disclose to a buyer.

This bulletin applies real estate brokerages, brokers, associate brokers and associates.

Buyers must exercise great care
Buyers must exercise great care when buying a property. We are used to hearing the Latin expression caveat emptor, which means “let the buyer beware.”

Buyers must satisfy themselves about:

Buyers must also make sure their offers include their particular concerns.

What is a material latent defect?
If a property has a defect that cannot be discovered with reasonable care during an inspection, that is a latent defect. A material defect is a defect that reasonable people would agree is significant in the particular circumstances of a transaction.

Section 1(1)(t) of the Real Estate Act Rules defines material latent defect. Read it, because it will help you decide what kinds of problems you must disclose. Do not forget a material latent defect may be more than a physical defect in the property.

It is not possible to list every type of material latent defect, but they include defects that:

A material latent defect may also exist if:

If you act for the buyer
If you act for a buyer, you must help your client meet their responsibilities to be careful. This may include:

RECA’s Property Inspection Request Form is an excellent tool to use to assist buyers to determine the condition of the property.

If you act for the seller
Sellers cannot hide defects or mislead buyers about the property’s condition or other attributes. They must honestly answer questions they are asked. They must also disclose material latent defects in their property that they know about.

If you act for a seller, you must disclose to the buyer or the buyer’s representative any material latent defects in the property that you know about. Do not participate in hiding or disguising known defects.

Examples of material latent defects

Related information

Legislation

Guides and tools 

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