Do you want to sell your house or another property? Be careful, because you have legal obligations to comply with when selling.
Indeed, the Civil Code of Quebec imposes specific rules on sellers, particularly with regard to latent defects. We explain these obligations in detail.
The legal guarantee of quality
When you sell a property, you must guarantee the buyer that it does not contain hidden defects that could affect its normal use.
As provided for in article 1726 of the Civil Code of Québec, you must guarantee that the property sold does not have latent defects that may interfere with the use for which it is intended. You must also guarantee that the property does not contain defects that would considerably reduce its usefulness to the point that the buyer would not have bought it or would have paid a lower price if he had known about it.
For example, if you sell a house and the buyer discovers after the purchase that it has serious problems with water infiltration in the walls of the façade, thus affecting the use of the house, and that these defects were not apparent at the time of the sale, you could be held liable for this problem and the consequences that result from it.
Obligation to inform the buyer
You have a duty to inform the buyer of any defect of which you are aware. It is forbidden to transmit misleading information to him.
Thus, as the case shows, Beaudoin v. Bernier, a purchaser obtained compensation after the vendor failed to disclose that the septic system had been modified without being restored.
In addition, under the first paragraph of article 1733 of the Civil Code of Québec, the seller cannot limit his liability if he has not disclosed defects that he knew or could not have been unaware of and that affect the quality of the property. The seller has the obligation to disclose to the buyer any problem related to the property, in particular the presence of a defect that affects it. However, it should be noted that there is a complete exclusion from the legal warranty if the buyer is aware of the presence of a defect during the purchase and the contract clearly states that the sale is made “at the buyer’s own risk”.
However, according to the second paragraph of article 1733 of the Civil Code of Québec, there is an exception when it comes to a professional seller. This is a person whose main job is to sell goods or services in a commercial context. Unlike an ordinary seller, a professional seller cannot use a clause that says that the sale is made “at the buyer’s own risk” to avoid being liable if the property has a hidden defect. This rule aims to prevent the professional seller from escaping the legal warranty, as it is considered that he knew or should have known about the problem. However, the exception to this rule is the principle that the professional seller may include such an exclusion clause in the sales contract if the buyer is also a professional.
Let’s take the example of the case 110319 Canada Ltd. v. Équipement J.Y.L. inc . Imagine that a professional used vehicle salesman sells a truck to another company. In the contract, he adds a clause excluding any warranty. However, he assures the buyer that the truck is in good condition. After the purchase, the buyer discovered several problems: the exhaust system had holes, and the windshield wipers and heater did not work. Given the importance of these defects, the seller could not have been unaware of them. To defend himself, he claims that his contract excluded any warranty.
However, according to the Civil Code, if a seller knows or cannot be unaware of a defect and does not mention it, he cannot hide behind an exclusion clause. In this case, the legal warranty still applies, and the buyer can claim compensation.
Obligation to reimburse
According to article 1727 of the Civil Code of Québec, if the property sold is seriously damaged due to the presence of a latent defect, you may have to reimburse all or part of the sale price. In addition, if the property loses only part of its usefulness, aproportional compensation may be required.
Duty to make reparation
At the time of the sale, in accordance with article 1728 of the Civil Code of Québec, if you are, or reasonably should have been, aware of the existence of defects affecting the property sold and you did not inform the buyer, or misled the buyer in this regard, you may be required not only to reimburse the sale price, but also to reimburse the sale price, but also to compensate the buyer for the damage. Indeed, you would be obliged to compensate the buyer for the damages suffered due to these defects.
This is what happened in the case Ruel v. Lavoie , where the seller had reassured the buyer that there were no problems with the floor of the building for sale. It was only after the acquisition that the buyer discovered the existence of latent defects affecting the land. Since the seller was well aware of the defect and failed to inform the buyer of it, he was ordered to pay compensation for the damage suffered.