When you purchase with Legal Warranty, you are protected against any hidden defects that you did not know of at the time of your purchase. However, there are strict criteria that a judge will look at when determining whether your situation should be considered a hidden defect:
1. The defect must have been unknown at the time of purchase. As such, any defect which was declared in the Vendor’s Declaration cannot be considered a hidden defect. Additionally, any defect which was brought up during the pre-purchase inspection cannot be considered a hidden defect.
2. The defect must be serious. You must be able to prove that you would not have purchased the property if you had known about the defect, or that you would have only purchased it at a significantly lower price. Minor repairs and renovations are therefore not considered to be hidden defects.
3. The defect must date from before the signing of the deed of sale (not the occupancy date).
If you find yourself in a situation where you believe you may be in the presence of a hidden defect, you are required to inform your Vendor about the situation, in writing, to give them the opportunity to inspect, evaluate, and correct the issue. If an agreement cannot be reached between yourself and the Vendor within thirty (30) days of them being informed of the issue and you still believe the issue is a hidden defect, you may seek legal representation by an attorney.
If you are buying without Legal Warranty or “At Your Own Risk and Perils”, this means that you are not protected against hidden defects, even if the above criteria are met.
A note about waiving the inspection: you are not required to hire a professional inspector before you make your purchase, however, your Legal Warranty may be diminished if you do not. You must act as a prudent and careful buyer, which includes performing a visual inspection of the property. If you suspect a defect, a prudent and careful buyer should hire a professional to perform a more in-depth inspection.
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