IT’S THE LAW – By Cassandra Douma
What would you do if you were the judge? Judges decide the facts based on evidence put before them, and then apply the law. Here is a fact pattern similar to some presented in court and assessed by judges. Test your judgment!
Barry Buyer was in the market to purchase a new home. Susy Seller had her home on the market, and after Barry viewed the property he made an offer which Susy accepted. The contract was subject to Barry obtaining financing and an inspection within 60 days. The contract also incorporated a Property Disclosure Statement (“PDS”) that Susy had completed about the condition of the property. One of the questions on the PDS asked if the Seller was aware of any structural problems with the building, to which Susy answered “No.” The PDS also contained a standard term urging the buyer to carefully inspect the property or hire someone to do so.
Barry subsequently removed subjects. He never hired anyone to conduct an inspection but was confident that he would have noticed any issues on his many visits to the property.
When he took possession of the house, Barry noticed the deck was somewhat spongy. He was concerned about this, so he hired a property inspector to take a look. When the inspector came, he looked at the whole property and found that the deck was indeed rotting and would need to be replaced. The inspector further found that there were structural issues with the house which would be quite costly to fix.
Barry decided to sue Susy for the costs of making repairs to the deck and fixing the structural issues.
If You Were the Judge, How Would You Decide?
The common law doctrine of caveat emptor or “buyer beware” applies to the sale of land in BC. Any problems with the property that are discoverable by conducting a reasonable inspection and making reasonable inquiries are known as “patent defects”. In a sale of property, patent defects should have been discovered by a buyer, and a buyer cannot claim any compensation from the seller unless he can show fraud or active concealment by the seller. Here, the state of the deck would be considered a patent defect, and Barry cannot claim compensation for something that he should have noticed.
The structural issues may be considered to be a “latent defect,” meaning one not discoverable by reasonable inquiry. For Barry to be compensated for the structural issues, he would have to prove that Susy knew these issues existed and did not tell him about them when she was obligated to. It would be difficult for Barry to rely on the PDS, as it only asked if Susy was “aware” of any such problems. Unless Barry can show that Susy knew about the problems, Susy will not have to compensate him for these defects either.
Cassandra Douma is an articled student who practices in Cloverdale with the firm MacMillan Tucker & Mackay at 5690 – 176A Street, Cloverdale (Surrey), B.C. At MacMillan Tucker & Mackay, lawyers are available to answer questions about wills and estates, ICBC claims, personal injury, professional negligence, family matters and other issues. If you require legal assistance, please call (604) 574-7431 to book an appointment.