Dear readers, you are no doubt aware of the multitude of information concerning the protection of buyers when purchasing movable or immovable property. This month's article is intended to raise awareness among sellers of real estate, and the precision to be applied when drafting the seller's declaration. The aim is to protect you from a potential claim by a buyer, based on circumstances that you have misperceived or that have not been presented to you correctly.
The seller's declaration is mandatory when an offer to purchase is made through a real estate broker. However, this is not the case for a sale made directly, without the intervention of a real estate broker, although this declaration is recommended for the reasons stated above.
The origin of this statement comes from article 1726 of the Quebec Civil Code, which deals with the seller's liability for latent defects:
The seller is obliged to guarantee to the buyer that the goods and their accessories are, at the time of sale, free from latent defects which render them unfit for their intended use, or which reduce their usefulness to such an extent that the buyer would not have purchased them, or would not have paid such a high price, had he been aware of them.
He is not, however, obliged to guarantee a latent defect known to the buyer, nor an apparent defect; an apparent defect is one that can be detected by a prudent and diligent buyer without the need for expert assistance.
A defect is a fault in a building. It must be sufficiently serious to reduce the value of the building or influence the decision to buy.
What information must be included in the seller's declaration?
You must mention all information concerning damage to your property or which could influence the decision to purchase, in particular in relation to :
The seller must also declare apparent defects and any others that could reduce the value of the property, such as water infiltration or insulation problems, even if you think they've been resolved.
The seller, presumed to be acting in good faith, must consider the consequences of his statements.
Here's a particularly pathetic case. The seller of the building had installed a high-quality auxiliary heating system, which required a small outdoor oil tank. He noticed a smell in the basement that seemed to be that of fuel oil. Indeed, it was!
Through an expert firm, he proceeds with total decontamination. As far as he was concerned, the problem was solved. But he neglected to mention this to his buyer. Surprise! The city informed the buyer that he was still liable in the event of a contaminant spill in adjacent buildings.
Other cases requiring clarification
The phenomenon of servitude can sometimes lead to major inconveniences for a buyer. You have aneighbor who claims to have a right of way over your building. However, you are convinced that he is wrong, because you have no recollection of this and therefore ignore him. It's possible that your buyer will later be called upon to take over your neighbor's claim, and that you will suffer the consequences.
You've converted your building to create a basement apartment to generate rental income. You did this in good faith, but failed to obtain a permit from your municipality. Your building has been put up for sale in this way. The certificate of location, obtained in extremis before the notarized transaction, shows that this layout does not comply with municipal bylaws. Your buyer holds you responsible for all costs incurred, since he would never have made an offer to purchase under these circumstances.
You had an infestation of carpenter ants a few years ago, which you had eradicated by a professional exterminator. You don't take this into account in your seller's declaration, because for you, it's a done deal. A few months later, your buyer discovers that some structural elements have been damaged by this pest, and holds you responsible.
We hope that this section will help you to understand that the seller's declaration document is far from trivial, and should provide as much information as possible to your future buyer. It's important to remember that it is possible to sue the seller provided you can prove that the defect is hidden, i.e. a serious defect that was unknown to the buyer at the time of the sale, that predates the sale and that was not apparent at the time of the sale.
Don't hesitate to ask your notary for advice when you decide to put your property up for sale, as he is the real estate law specialist par excellence.
For further information: www.cnq.org
