What could be more exciting than buying a house? Whether you are a young couple signing the offer to purchase a first home or a veteran of real estate transactions, the experience remains memorable. When a hidden defect creeps into the transaction, you can be sure it will be even more so, but this time for the wrong reasons! However, you can avoid this from happening if you take the right precautions.
We have to admit that no one is immune to such a vice and that you will have to turn to an expert quickly to get help! You can turn to a real estate lawyer specializing in hidden defects. Compare Lawyers explains exactly what such a professional can do to correct the situation!
How do you know if you’ve really discovered a hidden defect?
Unfortunately, not every damage in your new home will meet the definition of a hidden defect. The house may suffer wear and tear described as “normal and usual” which will not open the door to any recourse or compensation.
The law retains as the definition of hidden defect that of a defect, problem or defect which renders a building unfit for its intended use. This same defect must also have the effect of reducing the usefulness of the building. It goes without saying that a roof that lets water into the house leaves the house much less useful than it would be without such a burden.
However, the notion of utility, in such a context, also refers to the value of the house and the effect that a hidden defect will have on the value of the property.
Apart from this general definition, the hidden defect must also meet very specific conditions to confer rights on the buyer. In particular, it must demonstrate a certain character of seriousness. A simple scratch on the floor cannot be compared to a foundation that is decaying and prone to water infiltration.
Faced with such a serious problem, it must also be dated before the house was sold. It is the cause and not the effects of the defect which must precede the sale elsewhere! This is an important difference here, especially if the buyer takes legal action soon after the sale. He will benefit from presumptions against the seller that will help him prove himself.
A defect which was apparent to a prudent and diligent person will also not be considered a hidden defect. However, a seller can put himself in hot water if he makes false representations to his buyer to cover up a defect that would otherwise have been apparent.
In addition, when a contract is concluded on the occasion of false representations, the law allows you to claim not only the cancellation of the sale, but also damages for the fraud.
If you believe you have found a hidden defect, do not wait and contact a real estate lawyer without delay! If you fail to act quickly, part of the fault could be attributed to you and large sums of money could be lost!
Obligations of the buyer and seller in a real estate transaction!
With the number of real estate transactions concluded each year, it is no wonder that the law seeks to protect sellers and buyers from blunders causing substantial loss of money. This is why rights and obligations are provided to reduce errors as much as possible!
The seller’s rights and obligations:
- Deliver the house
- Hand over the title deeds
- Guarantee the quality of the property sold
- Report known and apparent defects
The rights and obligations of the buyer:
- Respect the terms of the offer to purchase
- Submit offers and counter-offers
- Make the offer to purchase conditional
- Receive a home that is free from defects
As you can see, both sides of the transaction has rights and obligations conferred by law. It is up to you to turn to a competent real estate lawyer for help if your rights are violated!
Steps to follow after discovering a hidden defect
When it comes to hidden defects, time is a critical issue! You have to act quickly, because many defects cause continuous damage, especially if water or mold is involved. It is important not to carry out any work without having contacted the seller! It will become all the more difficult to get your money back, so follow these steps instead.
Sending a written notice to the seller: More than just advice, sending a written notice to the seller is a legal obligation in a situation of hidden defect. You must give the seller the chance to come and see the defect and the damage himself.
Give the seller a reasonable period of time to correct the defect: Following this notice, you can give the seller a reasonable period of time to correct the defect. Since he may likely refuse, don’t rely too much on his cooperation and take the next step!
Attempt an Amicable Settlement: By seeking the assistance of a lawyer, you will have the opportunity to explore the possibilities of an out-of-court settlement. This could save you a lot of legal and extrajudicial costs in addition to favoring a winning solution for both parties involved.
File a lawsuit: Pray for peace, but prepare for war, as they say! Since the chances are slim that someone will hand you a check for several thousand dollars without grumbling, be prepared for the reality of the courts!
If all of your due diligence has been done, you’ve acted in good faith, and you’re dealing with a good lawyer, the odds are on your side to succeed!
What will happen if you win?
Winning your case for a hidden defect is a long and perilous road but which sometimes leads to very interesting compensation. Indeed, the law provides important protections for buyers and gives them the choice to request one of the following remedies.
Reduced sale price: When the buyer decides to take advantage of the reduction in the sale price, it will be based on the real value of the building with knowledge of the defect to request the difference between this value and the purchase value from the seller.
Cancellation of the transaction: Asking to cancel the sale of a house requires the presence of a serious defect. The buyer will have to show that if he had known of the defect, he would not have purchased the home.
Repair of the hidden defect: To demand such a remedy amounts to requiring the performance in kind of the seller’s service. The latter will therefore pay the necessary costs himself to hand over the house.
Lawsuit for damages: It is also possible for the buyer to bring an action against the seller for compensatory damages.
How do you determine which of these remedies is right for you? Each hidden defect case has its own distinctions which will dictate which of these solutions is right for you. For example, an insignificant defect will not justify requesting the cancellation of the sale.
Likewise, mold-ravaged walls and decaying foundations demand more compensation than a simple decrease in the sale price, especially if the home loses a huge chunk of its value for the same reason.
A real estate lawyer will be able to analyze your case and determine which of these solutions will best compensate you!
Purchase without legal warranty: Can you sue because of a hidden defect?
When selling a property in Quebec, a seller agrees to return a quality house or building free from defects. This is the general rule for almost all transactions and is called the “legal warranty of quality”.
However, with time and neglect being the biggest enemies of real estate, some of them sometimes find themselves in dire straits. This therefore pushes owners wishing to sell to take precautions to limit their personal liability in the event of a defect!
This is when they employ the mechanism of sale “without legal warranty at the risk and peril of the buyer”. As the name suggests, this is a way of telling the buyer that they are buying the house with full knowledge of the possible flaws that may be affecting them.
Thus, should a hidden defect surface, it would become impossible for the buyer to turn to his creditor to request compensation! This is the main benefit of a sale without legal warranty, which is normally accompanied by a considerable reduction in price.
But does the legal warranty deprive you of all your rights in the presence of a hidden defect? No, but almost! Truth be told, the only recourse you have left in such a sale is when a seller was aware of a specific defect that they have deliberately chosen not to mention to you.
This illegal maneuver can be considered a fraud, and involves a defect of consent which may give rise to the cancellation of the sale, to damages, or to a reduction in the price.
So just because you buy without a legal warranty doesn’t mean you no longer have any rights! A lawyer will quickly prove the opposite, you will see!
What precautions should be taken to avoid the risk of a hidden defect?
A real estate lawyer is essential to obtain compensation after the discovery of a defect. However, as any good doctor will tell you, prevention is better than cure! By taking the following precautions, you can avoid seeking a recourse against the seller!
Pre-purchase inspection: This step must be performed by a certified professional inspector! This will show you all the risky aspects of the coveted house, both in terms of the structure and its essential installations.
Notary / Lawyer Title Review: A defect could also creep up in the home title chain! This could compromise your status as an owner which is very costly if a former owner took the opportunity to go against you!
Do not buy without legal warranty (as much as possible): Unless you are an experienced investor and used to house flips, it is important to never buy a property without legal warranty. Unless you are 100% prepared to assume the financial risks, the legal guarantee is your best friend in the world of real estate transactions!
Sell or buy via an incorporated entity: An incorporated entity has a separate legal personality from that of its managers. By carrying out your transactions through this intermediary, you will limit your legal liability in the context of your transactions.
Did you know that Compare Lawyers can also put you in touch with notaries! This allows you to take advantage of a full range of legal services to ensure a risk-free home purchase.
What is a promise to purchase worth in a house sale?
In popular real estate culture, the promise to buy is often referred to as the offer to buy but there is no difference between the two. It is crucial to know the legal implications of a promise to purchase before signing it as it could cost you dearly if you change your mind!
How much could it cost you? The price of the house, approximately! What you need to know is that a promise to purchase is what the law calls a preliminary contract; an agreement entered into with the aim of providing for a future commitment under certain conditions.
Despite the term “pre-contract”, the promise remains a valid contract to which you have entered into and the seller has the right to force you to act on it. Once the promise is signed, if you decide to change your mind, the seller can sue you to force you to buy the house (and he will be successful).
This is the reason why you need to give it serious thought before committing! It is customary, of course, for the offer to buy to be conditional on certain factors, the most common of which is approval of funding from the bank.
This is not necessarily the case, however, and a seller is entitled to not state any conditions and even request a non-refundable deposit, down payment, or even down payment.
Are you unsure whether the presented offer to purchase protects you enough? Get a lawyer to take a look! He will present your rights to you in addition to making suggestions on how to make the transaction as secure as possible!
Why do you need to hire a lawyer in Montreal for a hidden defect case?
Real estate lawyers handle hidden defect cases. However, to maximize your chances of being compensated for the damage suffered, you must hire a hidden defect specialist. As the types of defects are often recurring and similar, this one will quickly tell you if your chances are good!
Analysis of the file and evaluation of the chances of success: A good lawyer will be very honest with you about your chances of success from the first meeting. Realizing that his fees are expensive, he will not make you waste your money working in vain, as the hidden defect specialists will quickly be able to determine whether your situation really meets the requirements of the law.
Support in the formal notice: As mentioned above, it is essential to inform the seller of the defect as soon as possible. Your lawyer will guide you in this procedure to ensure a smooth progress.
Development of a specialized legal strategy: As it is up to the buyer to prove that the defect dates from before the sale but that certain presumptions can work in his favor, the knowledge of a lawyer in real estate law will make it possible to identify the best approach from the start.
Taking charge of the case: Many hidden defect cases are settled out of court, especially when the fault of the former seller is obvious (better a reduced payment agreement for him and you will both save a lot in legal fees). If the case were to end up in court, this same lawyer will be able to defend your rights!
Compare Lawyers connects you with the best real estate lawyers in Montreal!
Do you think you bought a house with a hidden defect? Is water seeping through the roof as you are reading these lines now? Don’t sit idly by- call a real estate lawyer in the Montreal area now!
Not only will your troubles disappear but you will even have a good chance of receiving fair compensation for the troubles incurred!
How do you go about taking advantage of such services quickly? You should trust Compare Lawyers to find the hidden defect expert in Montreal to help you!
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