You are buying a property. After the purchase, you discover that your property is tainted by a hidden defect. You report this defect to the buyer, but the latter has not taken the necessary measures to repair the property.
Thus, you must take legal action to have the right, depending on the circumstances, to cancel the sale, to reimburse or reduce the sale price or to repair the property.
To win your case in matters of latent defects, it is important to remember that you must first meet the criteria of the legal warranty provided for in article 1726 of the Civil Code of Quebec. Indeed, the defect must be serious, present at the time of sale, hidden and you must not have been aware of it at the time of purchase.
Secondly, according to article 1739 of the Civil Code of Québec, you must not forget to report the latent defect to the seller in writing , as soon as you become aware of the seller’s presence or within a reasonable period of time.
What exactly are the recourses available to you in terms of latent defects? Which court has jurisdiction to hear your legal claim?
The action for price reduction
According to article 1726 of the Civil Code of Quebec, the seller must guarantee that the property he is selling to you is free of defects. If, after the purchase, you realize that the property has a defect, and if you had known about it before the purchase, you would have paid a lower price, you can ask for a refund of part of the price you paid. Indeed, the reimbursement requested cannot be equivalent to or higher than the sale price.
If you have repaired the defective property yourself, you may be able to ask for a reduction in the price based on the repair costs incurred by the defect.
To do so, you must have reported the defect to the seller according to article 1739 of the Civil Code of Quebec, but also have given him a reasonable period of time to act so that he can proceed with the repairs himself. In the event that the seller has not taken the necessary measures to repair the property, you can then proceed with the repairs yourself. Then, legal action will have to be taken to claim the reduction of the sale price.
However, you cannot request a reduction in the sale price based on the repair costs, when this cost is disproportionate to the sale price. As the case indicates, Bélanger v. Bouchard , in the event that you buy a house, discover after the purchase that the land of the property is contaminated and you proceed with the decontamination of the soil, you cannot claim reimbursement of the cost of the decontamination if this cost is very high and it is disproportionate in terms of the value of the land and the sale price. In this case, you must still be reasonable when it comes to undertaking repairs to repair the defect.
Indeed, the reduction in the selling price does not always constitute the cost of repairs. It is possible that you undertake repairs to the property with a defect, but that these repairs will increase the value of your property. Therefore, you cannot claim the price reduction based on the entire repair costs, because it would be unfair to the seller as indicated by article 1604 paragraph 3 of the Civil Code of Quebec.
Thus, to determine the price you are entitled to for an action to reduce the sale price, the court will have to take into account the circumstances surrounding the defect and its repair. In the case of a house, it will be a question of taking into account the cost of the work and the age of the residence.
It is also necessary to determine the reduction in the sale price, the price that the buyer would have agreed to pay to carry out the repairs and the price that he would have sold the property if he had been aware of the presence of the defect.
The action for cancellation of the sale
According to article 1604 of the Civil Code of Québec, you could request the cancellation of the sale. However, the latent defect must be very serious and considerably impair the use of the property. Generally, the court bases its analysis on the cost of the necessary repairs.
If the repair costs are low in relation to the value of the property, an action for price reduction will be possible as a remedy. If the repair costs are high and the defects are serious, the action to annul the sale would be more appropriate.
You would not be able to ask for a reduction in the sale price and subsequently the cancellation of the sale. However, when you apply to cancel the sale and it is refused, the court may decide to conduct an analysis to determine whether you would be entitled to a reduction in the price of the property sold. Indeed, implicitly, the requests for cancellation of the sale also have a possible component for a price reduction. It is an analysis that is carried out directly after a request for cancellation of sale that is refused.
According to article 1606 of the Civil Code of Québec, if the Court grants you the annulment of the sale on the grounds of latent defects, you must then return the defective property or offer to return the property to the seller, in the condition in which it was at the time of the sale. It will also be a question of claiming the restitution of the price and the costs incurred by the sale. The price is returned in exchange for a return of the property.
The action for damages
In addition to being entitled to a reduction in the price or a refund of the purchase price in the event of cancellation of the sale, you may also, depending on the circumstances, claim damages under article 1728 of the Civil Code of Quebec. To do this, you must be able to prove that the seller was aware of the defect or could not reasonably have been unaware of its existence. Damages are only intended to compensate for the harm suffered.
For example, as the case illustrates Saint-Loup v. Brisson , if, after the purchase of a condominium, you discover latent defects such as water infiltration, waterproofing problems and defects in the windows, and you then learn that the seller was aware of them but chose not to disclose them to you in order to complete the sale, you could take action. Since the seller was aware of these defects, you would be entitled to claim damages for the damage suffered.
Discovering a latent defect after the purchase of a property can quickly turn into a complex legal process. Whether you are considering a price reduction, the cancellation of the sale or a claim for damages, it is essential to prepare your case well and to comply with the criteria of the legal warranty.
Contact our latent defect lawyers now for a consultation and make sure you assert your rights.