Water Presence Discovered After Agreement Before Closing

Basement Waterproofing - Tree Roots Damage Oaklyn Basement - Water Puddles  in Oaklyn Basement

Considerations

Question:

Buyer does inspection before submitting offer. No problems come up and he buys the house firm. He goes for a revisit and notices a big puddle of water in the crawl space. Is the seller obligated to fix it before closing?

Answer:

First, nothing can be mandated to require the Seller to do anything BEFORE closing.

Several interesting issues here. The first issue is whether there is any kind of a problem at all. Assuming a 130 year old house, this is probably just “par for the course”. In any event, it must pass a certain threshold in terms of importance and relevance before it becomes sufficiently “material” to justify consideration.

Is there a Tarion Warranty? Is there a Builder’s Warranty? Is there any kind of transferrable Contractor’s Warranty?

Did the Agreement of Purchase and Sale contain any kind of warranty or representation? Was an SPIS attached? Was an SPIS completed?

Did the Agent or the Seller between the time of acceptance and prior to the NOF or Waiver of the home inspection condition make any statements to the Buyer, the Buyer’s Agent or the Home Inspector that might be actionable?

Is the presence of the puddle, new or old? Where did the water come from? Does the presence of the water indicate some kind of fault? If so, was that fault pre-existing or is it new? If it was old, did the Seller know about it? If it is new, insurance should cover the “spill”, that is, cleaning it up with a mop (subject to the policy deductible), but will not fix the problem unless that occurred by reason of an accident, nuisance or negligence of a third party. Ordinary, deterioration of the building or the foundation would not be included.

While the property remains at the Seller’s risk until closing, “reasonable wear and tear” is excepted, so might this possibly be considered as such? The onus of proof is upon the plaintiff making any allegations.

Always, a “tough call”.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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