Disclosure of Defects February 2001

One of the issues that challenges Vendors and Realtors every day has to do with what defects of a property they are obligated to disclose. The law relating to patent versus latent defects is clear -however the issue is best explained by example.

A court in Alberta recently faced the issue of whether or not the Seller of a property had to disclose a defect. In "Beaulne v. Ellenor", the seller of the property did not disclose to the buyer that the septic tank system was not operable. It turned out that the seller had pumped untreated waste to a spot about 200 feet away from the house for a year prior to selling. The Seller pleaded 'Caveat Emptor' -which means 'Buyer Beware'. The judge did not buy that argument (no pun intented) and ordered the Seller to pay the Buyer for the full cost of a new septic system.