Carpenter ants can be a potential hidden defect.

As buying a house is among the biggest purchases that most people will ever make, it is important to know that there are recourses available to you if you discover major problems. Indeed, when you buy a property, you expect to get your money’s worth, which means that a guarantee against hidden defects is essential. This guarantee applies whether or not the seller is aware of the problem, but only under certain conditions, and the way to take advantage of it is also complex.

Determining whether the problem is a hidden defect

As a general rule, for a problem to be considered a hidden defect:

• It must not be apparent at the time of the sale. The defect must prevent the new owners from using the property in a broad sense, which may also involve a reduction of its value. This defect can simply be due to normal wear.
• This defect must date from before the time of purchase and cannot be due to incorrect use by the purchaser.
• The purchaser must not have been aware of the problem at the time of purchase.
• This defect must be serious to the extent that the new owners, if they had known about it, would not have purchased the property or, at the very least, would have paid less for it.

Recourse in the event of hidden defects

In the event of a hidden defect, the purchaser sues the seller to cancel the sale or to reduce the purchase price – usually by the amount of the work required –, or asks the seller to make the necessary repairs. In turn, the seller may sue his or her own seller if the defect was present before the time of purchase.

It is also possible to obtain financial compensation if it can be demonstrated that the seller ignored the defect or that the defect was known but was not mentioned at the time of the sale.

The hidden defect must be declared within a reasonable time frame after its discovery. Formal notice must also be given before the problem is repaired. However, this time frame doesn’t apply if the seller knowingly concealed the problem from the buyer since the seller already knew about it.

That being said, each contract is different and can have additional guarantees or exclusions, depending on the case. You might want to consider consulting a lawyer specialized in such situations.