A recent decision provides another reminder of why prudent homebuyers should always insist on a home inspection.
The buyers agreed to purchase the property without making the sale conditional on a home inspection. However, the contract did include the right for the buyers to have two more viewings prior to closing.
During one of those viewings the buyers brought a family member with them who had experience in the construction industry to function as a home inspector. During the visit the family member, based on what he saw and was told from the seller and her partner, wondered whether there might be a water problem in the finished basement. However, he was unable to tell based on his visit.
The purchasers closed the transaction and sure enough within a month the new owners discovered a foundation leak. They sued the seller for breach of duty of disclosure.
The trial judge considered a long line of authorities and concluded that even if the seller knew of the leak (which was not accepted by the judge) she had no duty to disclose the information in light of the entire agreement clause.
The law in the Province of Ontario is that a seller is prohibited from actively concealing a defect or failing to disclose a latent defect which renders a premises dangerous. Aside from this, a seller is under no duty to disparage the property and may remain silent.
As such, buyers ought to insist on a home inspection clause coupled with a demand for a seller property information statement to properly protect their interests.