(Ontario)
Question:
Following the closing, my Buyers discovered that the shower on the second floor was leaking. When they saw the property before they submitted an Offer, they liked the newly installed bathroom. There’s a wet spot on the ceiling in the family room. The property was newly renovated and the Seller never lived there.
Answer:
Your Clients purchased a house which they believed to include brand new and newly renovated bathroom fixtures (showers, drains, faucets, inlets etc.).
The Seller may or may not be responsible under the contract.
The standard form Agreement of Purchase and Sale provides for the transfer of the property in “as is” condition. If there is a leak, which was undiscovered by the Buyer at the time of inspection, then so be it, the Buyer assumes responsibility.
However, hopefully, we don’t have the standard form APS. The APS may have included a “good working order” clause which survived closing. It may have made reference to the bathroom renovations. They were supposed to be new and I would expect to have been “professionally installed in a good and workmanlike manner”. So, hopefully, there’s a clause to that affect in the agreement. That’s your contractual remedy.
If that were the fact, then the Buyer may sue the Seller in contract, and the Seller would be responsible. If the additional clause were not included, then the Buyer can still sue the Seller, but has to prove that the Seller knew of the defect. That’s a little more difficult. The Seller here may simply have had “no knowledge”, since he never used the bathroom fixtures following installation.
There is no remedy against the manufacturer of the bathroom fixtures unless the APS included a clause assigning the “warranty”. Hopefully, a clause to that affect was also included in the APS. Also, there should have been a clause assigning the benefit of the renovation installation contract. If this were not the case, the renovator could still be sued under the law of torts, however the damages would be limited to the repair work necessary and the cleanup, but the defective equipment would not be covered.
That leaves an insurance claim. They will repair the damage subject to the deductible but not fix the defect.
The real difficulty here is that the amount at stake is likely too small to justify any action in Small Claims Court. The jurisdiction has now increased to $35,000.00.
Brian Madigan LL.B., Broker