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John Helfrich, Broker, Real Estate Homeward , Brokerage | 416.698.2090 | Direct: 416.464.8920 | John@EastEndTorontoHomes.com

Home Inspection Can't Always Find Hidden Defects

November 22, 2011

Buyer Had A Home Inspection - Then Relied on Sellers Disclosure Statement

Home inspection, Toronto Real Estate, Toronto HomesCBC News recently covered the story of a B.C. home buyer who had an independent home inspection before buying his home. The home inspection contract states that it is a visual inspection and the Home Inspector can not identify hidden defects or do 'destructive' testing to search for problems.

The Home Inspection Report did not indicate any problem with water damage.

In addition, the Seller provided a Disclosure Statement that said there were no water problems in the house. But only a month after moving in, the basement sprung a major leak. Estimated cost of repairs - about $50,000.

Buyers Deserve Better Protection Than the Rule of 'Buyer Beware'

The Seller was a renovator/developer who apparently bought the home to fix up and flip. He knew there were water problems in the basement, which he later said he had repaired by putting in a new drainage system.

When the house was later listed for sale, the prior water damage was not reported on the Property Disclosure Statement. The Listing Agent said the Seller insisted it was fixed and told the Agent not to disclose it on the listing. The Seller said just the opposite: that the Agent declared it unnecessary to report since it was no longer a defect.

The Rules are NOT Clear - Or Consistent

Every province has rules about disclosing major hidden defects - IF they are dangerous. The rules in B.C. say that when a problem has been fixed, it's no longer an issue.

But what happens when a problem doesn't stay 'fixed'? Usually it's the Buyer who's out of pocket - or there's a costly lawsuit. There's little chance that you'll recover 100% of your court costs and out of pocket expenses - even if your law suit is successful.

So How Do You Protect Yourself if The Seller Isn't Truthful?

In Ontario, we call known defects that are hidden from view or occur intermittently, 'latent defects'. The very definition of a 'latent defect' means that in some cases, even a professional home inspection won't find it. (Home inspectors are prohibited from damaging walls to look inside.)

Just the same, the only way to protect yourself is to hire your own home inspector. In the course of a typical 3 hour home inspection, they'll often find tell-tale signs that arouse suspicion. Follow up on those suspicions by asking the Seller direct questions, and where necessary, request written permission to do further tests. If the Seller is unwilling to cooperate, maybe you should find another home.

What's Next?

Find out how to protect yourself when buying your first home. Download our FREE First Time Buyers Guide.

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