Abbotsford|Mission Buyer Beware
This is what we know at Homelife Realty in Abbotsford | Mission; Detailed professional home inspections are very important, where as partial inspection create buyers beware doctrine. A recent Provincial Court decision was an excellent example of how BC higher court judgments are applied to the factual problems that arise between buyers and sellers.
In the Provincial Court decision, the defendant, Montpetit, purchased a fire-damaged house. He undertook extensive renovations and listed the renovated property for sale. Montpetit signed a Property Disclosure Statement (PDS) which, by way of a line drawn through all of the various sections, made no disclosure about the property. The Realty Company and the listing REALTOR® acted as limited dual agents for the seller, as well as the claimants who bought the property.
The buyers’ offer to purchase was made subject to inspection. The inspection report listed deficiencies, most of which were dealt with by the seller prior to closing, but also recommended that a crawlspace be further inspected; this was not done prior to closing. After the purchase, the buyers experienced flooding in the basement from the uninspected crawlspace and a second inspection uncovered additional problems.
The buyers sued the seller for failing to disclose the deficiencies.
The court analyzed the property deficiencies within the context of the caveat emptor (“buyer beware”) doctrine, which necessitates that the buyer must “fend for himself, seeking protection by express warranty or by independent examination” and if the buyer fails to do so, then “he is without remedy either at law or in equity.”
An exception to this doctrine is a seller’s requirement to disclose a property’s latent defects which could not be discovered upon reasonable inspection by a qualified person. The court followed the BC Court of Appeal decision in Cardwell v. Perthen and concluded that as the deficiencies could have been discovered upon inspection, they were NOT latent defects and the buyers’ failure to discover them left no recourse against the seller.
The court found that they did not have any direct knowledge of the deficiencies and misrepresentations and nothing in a REALTOR®’s standard of care to a client set out in the BC Supreme Court decision of Brown v. Douglas suggested they should have known. They did not have a duty to warn a client of obvious risks (patent defects) and were not held to possess the skills of building inspectors.
This case highlights a common dispute: the post-closing discovery by buyers of property defects. It once again emphasizes the strength of the caveat emptor doctrine and the limitations of the PDS. A buyer is responsible to discover all property defects which could be discovered upon a reasonable inspection by a qualified person. A buyer who chooses to purchase a used property without first having it inspected by a qualified person takes a significant risk and may have no recourse against the seller or REALTORS® involved. Brian Taylor Bull Housser LLP – See more at: http://www.bcrea.bc.ca/news-and-publications/publications/legally-speaking/legally-speaking—october-2013-(465)#sthash.wqCZx2Zf.dpuf
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