How do I know if my home has Material Latent Defects?


What are Material Latent Defects?

It is your responsibility to disclose all material latent defects that you know about. A Material Latent Defect is “a physical defect that is not discernible through a reasonable inspection, and makes a property: dangerous or potentially dangerous to the occupants, unfit to live in, unfit for a buyer’s purpose, should that purpose be known to the sellers”

In simple terms, Material means major and Latent means hidden – so its a defect in your home that is both major in terms of the cost and/or work to remediate and hidden or not able to be found reasonably. 

What MUST I disclose as a seller?

It is illegal for home sellers to hide any Material Latent Defects or mislead buyers about the property’s condition or other attributes. You must disclose all material latent defects that you know about. Any attempts to hide a Material Latent Defect would be considered would be considered fraudulent misrepresentation. Defects include expensive repairs, dangerous living conditions, notices received by the homeowners about repairs that must be completed on their property, and not having the appropriate building permits.

Some examples of Material Latent Defects include:

– Knowing that your basement floods every Spring when it rains.

– Your basement, deck, garage, etc. was built without the necessary permits.

– The home was a former marijuana grow-op and the property hasn’t been remediated or the home was a former production operation for fentanyl or other opioids. These operations can leave behind mould growth or particles that would be dangerous to occupants of the home.

– A crack in the foundation of the home was covered when the basement was finished.

If there are major defects in the home that are not hidden, OR hidden but not major, these are not deemed as a Material Latent Defect as they could be discovered by the buyers through reasonable inspection and/or will not result in costly remediation for the buyers.

How can my home sale be impacted by Material Latent Defects?

Not disclosing Material Latent Defects could jeopardize your home sale if the defects are discovered by a buyer during an inspection, or by their own real estate professional or lawyer when they review permits, real property reports, or title. 

It is very serious to withhold information about Material Latent Defects as a home seller. When a seller signs the purchase agreement accepting the sale, they are making a warranty statement to the buyer that there are no known Material Latent Defects unless otherwise disclosed. Buyers could potentially pursue legal action against the seller to hold them liable if this is determined to be untrue and the seller had knowledge of any defects.

The difference between "Stigmas" and "Material Latent Defects"

In Alberta and British Columbia, stigmas are not considered as a Material Latent Defect but may still need to be disclosed by the home seller if the buyer asks about them directly. These include things that may cause the buyers to form a stigma against the property or be psychologically opposed to owning the home or living in it. 

Examples could include:

– A death occurred on the property

– There are reports that the property is haunted

– The property was robbed or vandalized

– A sexual offender is reported to live in the neighbourhood

– A former resident was suspected of being an organized crime gang member

As a home seller it’s best not to withhold this type of information when asked directly by buyers as it could result in legal action against sellers in the future if this information is discovered.

Disclosing Material Latent Defects when listing with Bōde

When selling your own home with Bōde, the process of disclosing any Material Latent Defects is simple. When sellers create their listing, they will be asked during the process if they are aware of any Material Latent Defects of the home and can answer Yes or No. If Yes is selected, the seller will be asked to provide more details. 

The rest of the listing process is just as easy. Get started by clicking below! 

Why sell your own home with Bōde? 

You don’t have to take our word for it…

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