Latent Defects and Misrepresentation

Some problems only appear after the keys change hands, such as water in the basement, a cracked foundation or an unpermitted renovation. Whether the buyer has a claim depends on what the seller knew, what was said, and what an inspection would have revealed. We act for buyers bringing these claims and for sellers responding to them.

Common situations

Water leaks, mould or flooding that appear after closing
Structural or foundation problems
Renovations or additions completed without permits
Untrue statements in the listing, the Seller Property Information Statement or conversations before the sale
Environmental, pest or other problems that were not disclosed

The legal starting point

For resale property, Ontario law begins with the principle that the buyer must look out for problems (“buyer beware”). A buyer is expected to find defects that a reasonable inspection would reveal. The position changes where:

the seller knew of a hidden defect that makes the property dangerous or unfit to live in, and did not disclose it;
the seller actively concealed a defect, for example by covering water damage;
the seller made an untrue statement, fraudulently or carelessly, and the buyer relied on it; or
the agreement contains a warranty that turned out to be untrue.

What happens next

Preserve the evidence. Photographs, video, contractor reports and, where possible, the defect itself before repairs.
Gather the transaction documents. The listing, the Seller Property Information Statement, the inspection report, the agreement and any warranties.
Assess what the seller knew, and whether anyone else may share responsibility.
Put the seller on notice, and decide whether the claim belongs in Small Claims Court or the Superior Court of Justice.

Timing

The two-year limitation period generally runs from the day you discovered, or reasonably ought to have discovered, the claim. With defects, the discovery date is often disputed, so act promptly once a problem appears.

Questions we are often asked

Does a seller have to tell me about every problem with the property?

No. For resale property, Ontario law does not require a seller to disclose every defect. The main exceptions are a known hidden defect that makes the property dangerous or unfit to live in, active concealment of a defect, and untrue statements the buyer relied on.

What if the seller filled out a Seller Property Information Statement?

Untrue answers on that form can support a misrepresentation claim. How much weight the form carries can depend on whether it was made part of the agreement and on what else the buyer was told.

Should I repair the problem before starting a claim?

You should take reasonable steps to stop further damage. Before permanent repairs, document the problem thoroughly with photographs and a contractor's report, and consider giving the seller notice and a chance to inspect.

Can I make a claim against the home inspector or the real estate agent?

Sometimes, depending on what they were retained to do and on the terms of their contracts, which may limit their liability. We look at everyone who may share responsibility.

General information about Ontario law, not legal advice about your situation. Time limits can be short; if you are unsure, speak with a lawyer promptly.