The Small Claims Court can only order the return of property or repayment of up to $50,000 in damages. Yet the nature of the cases this court considers can vary widely. Among others, they include disputes arising from real estate transactions, such as 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 find themselves in the unfortunate situation of having purchased a home and discovering it has defects. These defects may cost thousands to repair. If it happens, there are several essential points to consider before filing a lawsuit in Small Claims Court.
Nature of the Defects
The nature of the defect is a fundamental consideration. There are two types of defects:
- Patent defects
- Latent defects
Patent Defects
Patent defects are those that can be discovered during a visual inspection. They are apparent to any buyer exercising ordinary vigilance. However, the seller is not obligated 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 post-purchase roof repairs. 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 purchase, whether independently or through an inspector.
Latent defects
On the other hand, latent defects are those that a buyer cannot discover through 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:
- Knew about the latent defect and did not disclose it to the buyer, or
- 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 the house is free of certain defects, or
- The seller fraudulently misrepresented facts relating to latent defects.
As you can see, it is essential 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 the complexity of real estate transactions, vary significantly in detail and circumstances. For legal advice concerning your particular matter, please contact a legal professional.
