Wednesday, September 2, 2009

In an action by a buyer of an immovable property for latent defects, what is
the extent of the legal obligation of the buyer to give notice to the vendor?

On August 25, 2005, R sold a residential property to B. The sale was preceded
by an inspection, which was generally favorable.
A few weeks after taking possession of the property, the buyer noticed the
presence of water infiltration in the basement. An inspection by a plumber who
was called to inspect the pipes revealed no irregularities.
In November 2005, the buyer hired Pro-solage to repair three (3) cracks in the
foundation that had been identified by the inspector. Pro-solage also discovered
that the wall near the patio was not waterproofed and was in the process of
eroding. The estimate to repair this problem was $14,300.
On December 21, 2005, the buyer informed the vendor by telephone of the
issues that had arisen since the transfer of possession.
On January 9, 2006, the buyer gave formal written notice of the hidden defects of
the property.
On January 18, a heavy rain resulted in water infiltration in the basement. The
same day, the buyer hired an engineer to determine the cause.
In his report, the engineer attributed the cause of the water infiltration to the
absence of a waterproof membrane between the wall and the patio.
On February 10, 2006, a second engineer was hired by the buyer to provide a
second opinion. In his report, the second engineer concluded that the water did
not come from the exterior but rather from an overflow of the hot water reservoir.
He estimated that the corrective work would cost $3,500.
On May 12, 2006, the buyer hired a foundation specialist to obtain an estimate
for corrective work, including excavation, structural work, demolition, and
reconstruction of foundation for the part of the wall next to the patio.
On July 27, 2006, a formal demand letter was sent to the vendor, the buyer
declaring that she would proceed with the corrective work on July 31, 2006.
However, the vendor was on vacation until August 12, 2006 and upon her return,
most of the work had already been completed.
The vendor never had the opportunity to verify the nature of the defect nor the
extent of the work required to correct it. The vendor did not have the opportunity
to verify the feasibility of having the work done at a lesser cost.
Although the law is clear regarding the obligation of the buyer to give notice of
the existence of a hidden defect, the extent of the notice will vary depending on
the circumstances.
The purpose of the notice is to protect the rights of the vendor, who is no longer
in possession of the property and to prevent abuse on the part of a buyer in bad
To be valid, the notice must:
i) be given within a reasonable delay;
ii) be sufficiently precise to permit the vendor to identify the nature
of the defect and the corrective measures required to remedy it;
iii) permit the vendor to establish that the defect existed prior to the
sale, and
iv) allow the vendor to remedy the situation himself.
However, these principles are not absolute and are subject to exceptions, such
as matters of urgency, repudiation by the vendor of any responsibility or upon
evidence that the objectives of a formal notice have been met in other ways.
In the case at bar, the Court held that the notice did not allow the vendors to
identify the nature of the defect, whether or not it existed prior to the sale, and the
corrective measures necessary to remedy it at the least cost. The notice given by
the buyer did not respect the vendor’s legal rights. Although the notice of January
9, 2006 was given within a reasonable delay, the vendor did not have an
opportunity to evaluate the nature and the extent of the hidden defect nor to
assess the appropriate corrective measures and their cost.
In such circumstances, the Court has discretion to either reject the buyer’s claim
for latent defects altogether, or to reduce it, which is what the Court chose to do
in the present case.
Béique –vs- Rodier EYB 2009-157651
(April 20, 2009 (Lalonde, J.S.C.)