It may happen that after buying a building or a house, you discover that the soil surrounding your property is contaminated. In fact, the contamination of the soil around a building can generate several inconveniences, both environmentally and economically in terms of the necessary decontamination costs.
You want to make a claim against your seller on the basis of hidden defects.
What are the conditions to be respected? What recourse can you take?
The legal warranty
Often, when we talk about soil contamination, we refer to contamination by hydrocarbons or chemicals. Thus, if you discover, after the purchase, that the soil on your land is contaminated, you must ensure that the cumulative conditions are met for this defect to be qualified as a latent defect.
To be entitled to the legal warranty of quality that protects you as a buyer provided for in article 1726 of the Civil Code of Quebec, the defect must be considered as:
- Hidden
- Serious
- Unknown to the buyer at the time of the sale
- Present at the time of the sale
For example, in the case Mellati v. Cvesper , the plaintiff had acquired a property for the purpose of demolishing the abandoned buildings in order to build a new residence. After the purchase, he undertook excavation work, during which he discovered a buried oil tank as well as hydrocarbon contamination of the soil.
At the time of the sale, the plaintiff, although having acted with prudence and diligence, could not have detected the presence of contaminated soil. He also denounced the presence of the defect to the defendants in accordance with the Civil Code, within a reasonable time, considering that, despite a slight delay, the defendants quickly denied any responsibility in this regard. The Tribunal granted judgment in favour of the applicant.
One way to assess the seriousness of a defect is to analyze the consequences of the defect. For example, a contractor who buys land or a building as part of a concrete project and who subsequently discovers that the soil is contaminated could be refused bank financing, thus compromising the realization of his project and justifying the seriousness of the defect. There must be proof of the refusal and/or difficulty in financing, as well as to demonstrate the impact that this would have on the economic value of the Building.
In order for an action for latent defects to be upheld, the Court also analyzed the loss of use of the property resulting from the contamination of the soil. In other words, if you buy a large piece of land for the purpose of carrying out a specific project, but a small portion of it is contaminated, and this contamination causes only minimal costs, the courts may consider that the defect is not serious enough to justify a remedy.
Environmental Audit
Although a legal warranty is provided for latent defects, you must exercise caution and diligence when buying a property. Thus, if you acquire land that previously belonged to a company whose activities were likely to contaminate the soil, such as a chemical or cement manufacturing company or a vehicle maintenance service, it is your responsibility, as a prudent buyer, to have an environmental assessment carried out.
So, if you buy a piece of land knowing that it has already been used as a waste disposal site, but you don’t call on an expert to conduct an environmental audit, you could find yourself without recourse if contamination is discovered after the purchase.
For example, in a similar situation, if you buy a property and then find abandoned reservoirs near a stream containing hydrocarbons that have seeped into the ground, contaminating an area located beyond the regulatory limits provided for in the Land Protection and Rehabilitation Regulation, the court may refuse to grant your action, finding that you have not acted as a prudent and diligent buyer by refraining from calling on an expert for an environmental due diligence.
Decontamination costs
If it has been established that the soil contamination is indeed a latent defect, you may be able to claim from the seller a reduction in the sale price according to article 1604 of the Civil Code of Quebec representing the costs necessary to proceed with a soil decontamination.
This is precisely the case in the case Constructions Denys Lehoux et Fils inc. c. 2869-7969 Québec inc., where the plaintiff sued the seller of the land he had purchased for the purpose of constructing rental properties. A few months after the purchase, he decided to put the land up for sale. At the request of a potential buyer, soil tests are carried out, revealing that a parcel of the land is contaminated with hydrocarbons and arsenic. Fulfilling the criteria for latent defects, the court awarded the plaintiff the sum of $45,982.53, corresponding exclusively to the costs of soil decontamination.
Soil contamination can have major environmental and financial consequences for a buyer. If you discover, after the acquisition of a plot of land or a building, the presence of polluting substances, you should know that it is sometimes possible to file an action against the seller on the basis of latent defects.
However, each situation depends on specific criteria: severity of the defect, hidden nature and diligence of the buyer. If you are faced with a soil contamination problem, our team of lawyers specializing in real estate litigation can assist you in protecting your rights and obtaining compensation. Contact us today.