Latent vs. Patent Defects and Property Inspections

The BC Supreme Court case of Cardwell v. Perlien provides an interesting overview of the current state of the doctrine of caveat emptor (“let the buyer beware”)

The distinction between latent and patent defects is important, because sellers are obligated to disclose material latent defects that they are aware of, but buyers are expected to discover patent defects on their own. Patent defects are described as those that can be discovered by conducting a reasonable inspection and making pertinent inquiries about the property.

Significantly, however, the judge goes on to say that a “defect which might not be observable on a casual inspection may nonetheless be patent if it would have been discoverable by a qualified person…In some cases, it necessitates a purchaser retaining the appropriate experts to inspect the property…”

This highlights the importance of buyers having inspections done, and where a generic home inspection would be inadequate, retaining the person with the specific expertise to do the job (i.e. building envelope expert or well inspector).

In a hot market, offers subject to conditions may be be practical. In addition, a common obstacle to having inspections done is the unwillingness of the buyer to pay for them. Unfortunately, it is precisely the frugal buyer who will be looking for someone else to pay if defects are subsequently discovered.

In either case, the Real Estate Board of Greater Vancouver advises all licensees acting for a buyer, as standard practice, to discuss making the offer subject to the appropriate inspections and the risks of not doing so. In a hot market you can do the inspection prior to making the offer.

What is your experience? Have you made an offer without a builiding inspection and if so, were there any major consequences? Alternatively, have you discovered items during a building inspection that convinced you it was a prudent ‘due diligence’ on your part? Have a superb building inspector you’d recommend and if so, what made him stand out from the crowd?

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