Disclosure of Water Leak in the Basement



The deal has closed and no one knew about the water leak in the basement. The neighbor says that it was a problem for years.

Did the Seller have to tell?


All properties are sold in Canada subject to the principle of caveat emptor, meaning that the Buyer must protect himself “buyer beware”.

The Seller can remain silent unless there is a latent defect. First, there is a determination of whether or not the defect is latent (hidden) or patent (in full view). If it cannot reasonably be discovered upon inspection, then it’s latent.

The next step is whether or not it’s material. That would mean whether it’s important enough, that a Buyer would want to know about it. The definition of “material” is not found in the Code of Ethics.

Brian Madigan LL.B., Broker


Comments 1

  1. If a basement cold room leaked for years but has been fixed (front porch was the issue and was re-done with new concrete and has not leaked for 3 years), does the Seller have to disclose? Thanks

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