Join Megan and guest Me. Sevana Poladian, a seasoned Quebec lawyer specializing in real estate litigation, on this episode of the Broady Windsor Group podcast. Delve into the intricacies of legal warranty in real estate transactions, understanding hidden and latent defects, and the crucial role of due diligence. Gain valuable insights into the notification process for defects, seller's responsibility, and the remedies available for latent defects. Whether you're a homeowner or a prospective buyer, this episode provides essential knowledge to navigate the legal aspects of real estate.
Legal Warranty in Real Estate Transactions
- Legal warranty, as per Article 1726 of the civil code of Quebec, obligates sellers to warrant that the property is free from latent defects affecting its intended use.
- Sevana emphasizes the importance of understanding legal warranty, a key aspect in real estate transactions.
Responsibility for Defects and Notification Process
- If a buyer discovers a defect, they must notify the seller within a reasonable timeframe.
- The severity of the defect determines the reasonable delay; serious issues require quicker notification.
- The buyer has three years from the discovery of the defect to file a lawsuit against the seller.
Seller's Responsibility and Bad Faith
- Even without legal warranty, a seller can be held responsible in cases of bad faith, where they intentionally withhold information about defects.
- Legal experts recommend opting for the legal warranty option due to its evidentiary advantages over proving bad faith.
Hidden and Latent Defects
- In Quebec, the terms "hidden" and "latent" defects are often used interchangeably.
- Five criteria must be met to give rise to a legal warranty claim, including seriousness, hidden nature, unknown to the buyer, pre-existence, and proper notification.
Court Procedures for Legal Warranty Claims
- Depending on the claimed amount, legal warranty claims go to different courts in Quebec: small claims court, Civil Division of the court of Quebec, or the superior court.
- Small claims court doesn't allow lawyers; above $15,000, a lawyer can be hired.
Importance of Due Diligence
- Due diligence, though not explicitly in the legal code, is crucial in real estate transactions.
- A 1989 case emphasized the buyer's obligation to inspect and be aware of potential defects, setting a precedent for due diligence in real estate.
