The Small Claims Court can only order the return property or repayment of up to $35,000 in damages. Yet, the nature of cases this court considers can vary broadly. Among others, they include disputes arising from real estate transactions – the purchase and sale of homes. One specific example is a buyer’s claim for the defects in the property discovered after the purchase. 

Anyone may get into the unfortunate situation where she/he has purchased a home and found that it has defects. These defects may cost thousands to repair. If it happens, there are several important points to know before considering a lawsuit in the Small Claims Court.

Nature of the Defects

The nature of the defect is a fundamental consideration. There are two types of defects:

1. Patent defects
2. Latent defects

Patent Defects

Patent defects are those that one can discover during an inspection. They are apparent to any buyer exercising ordinary vigilance. However, the seller is not under obligation to call attention to such patent defects. It is up to the buyer to conduct the inspection and make the necessary inquiries to bring patent defects to light. If the buyer neglects to do so, he or she cannot afterwards sue the seller for damages.

For example, the leaking roof with a clearly visible stain on the ceiling is a patent defect. In this case, it is unlikely that a buyer can successfully sue the seller for the roof repair post-purchase.  Though, of course, specific circumstances of the situation must be considered every time. Nevertheless, if the defect is so apparent, the court will generally rule in favour of the seller. The buyer’s responsibility is to notice such a defect before the purchase, independently or via the inspector. 

Latent defects

On the other hand, latent defects are those defects that a buyer cannot discover using a simple observation or a professional inspection. The seller may be liable for such defects. This liability, however, is conditional on two factors. The buyer must show that the seller either:

1. Knew about the latent defect and did not disclose it to the buyer, or
2. Took active measures to conceal the defect before the completion of the purchase.

For example, there was mould in the basement. The seller actively concealed the mould stains under a layer of paint. In this case, the buyer would have a good chance of successfully suing the seller in the Small Claims Court. She/he may claim the cost of dealing with the mould.

Additional grounds for the seller’s liability

Further, there are some additional grounds on which the seller can be found liable for defects in a purchased property:

• The seller provided an express warranty that a house is free of certain defects, or
• The seller fraudulently misrepresented facts relating to latent defects.

As you can see, it is important to do your due diligence when purchasing a home. However, where latent defects come to light post-purchase, the Small Claims Court is the forum for your claim to be heard.

Please note that the above is not intended as legal advice. Accordingly, you should not consider it as such. Small claims cases, especially those of such complexity as cases revolving around real estate transactions, vary greatly in detail and circumstances. For legal advice concerning your particular matter, please contact a legal professional.