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Caveat Emptor

Caveat emptor, qui ignorae non debuit quod jus alienum emit.
- Let a purchaser, who ought not to be ignorant of the amount and nature of the interest, exercise proper caution.

The common law for the resale of real estate does not imply any promises of quality, habitability or reasonable fitness for a particular purpose. In Ontario that doctrine has been changed for new homes by legislation such as contained in the Ontario New Homes Warranties Plan Act.

Buyer and Seller Issues

The doctrine of caveat emptor basically means that sellers need not be concerned about the state of their resale property. However, there are some exceptions to the caveat emptor principle:

While sellers do not generally need to voluntarily disclose most latent defects, the courts have found an obligation on sellers to disclose material latent defects of which they are aware, such as those that make the property unfit for habitation, or dangerous, or that pose a serious health or safety risk. And, of course they can’t lie, if asked, even about a non-material latent defect … that would fall under the above-noted misrepresentation exception to caveat emptor.

Sellers are generally not required to disclose patent defects and therefore buyers take the property “as is” unless the contract provides otherwise. “Absent fraud, mistake or misrepresentation, a purchaser takes existing property as he finds it, whether it be dilapidated, bug-infested or otherwise uninhabitable or deficient in expected amenities, unless he protects himself by contract terms.” – quote from the late Bora Laskin, former Chief Justice of the Supreme Court of Canada

Latent Defect of Quality - Those that are hidden and not readily apparent to a buyer by any reasonable inspection.

Patent Defect of Quality - Those that would be discovered by a buyer by inspection and ordinary vigilance.

August 30, 2007 in Real Estate Practices | Permalink


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Wonderful article with lovely theme. I have seen in movies how a realtor shows houses to their client and get high paid commission on selling thousands of dollar houses. I also wanted to be a real estate agent in my city.

Posted by: Rancho Palos Verdes real estate inspection | Apr 22, 2012 11:10:20 PM

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