It can be concluded that in the event of hidden defects, a contract with the seller containing the exclusion of liability “without legal warranty and at the risk and peril of the buyer” is certainly a dangerous clause that potential buyers should pay attention to before agreeing. The Quebec Court of Appeal had the opportunity to render a decision in December 2018 describing a clear distinction between the concepts of hidden error and fraud. The court ruled that an exclusion from the legal guarantee against hidden defects does not release the seller from his obligation of good faith in the context of the conclusion of a contract of sale[18]. In Quebec, the basic rule is simple: each property is sold with a guarantee that exists according to the law on the validity of the title and the quality of the immovable. Under this law, a buyer who has taken possession of a property can sue the seller if he discovers defects of which he could not reasonably have been aware at the time of the transaction. If this is your dream property, you probably won`t want to give up the opportunity despite the lack of legal warranty. They also don`t want to risk falling into a huge trap. Here are some suggestions to make sure you make the best decision regarding the purchase of the property. The phenomenon of sales without legal warranty has been observed for several years in real estate transactions in Quebec. However, this phenomenon has increased since 2019 during the pandemic. Buyers may choose to waive the legal warranty to facilitate the acquisition of the coveted property. Sellers, on the other hand, sell their property without legal guarantees, thinking they will let go of their responsibility.
But is it really a good idea? Yes, the seller can exclude the legal warranty. The offer to purchase must state that the sale is made “without legal warranty, at your own risk”. A property sold without a legal warranty generally has the following wording: The legal warranty includes both the warranty of quality and the guarantee of ownership. The effect of this clause and all its possible deviations is therefore not only to exempt the non-professional seller from the guarantee against hidden defects[4], but also to demonstrate the buyer`s willingness to acquire the property without the legal guarantee[5]. But also with regard to evidence: “The rule of predominance of evidence applies in such cases, and fraud can be proved by any means, including the victim`s testimony, without the need to confirm it.”[10] The guarantee of the right of ownership concerns defects of the right of ownership. This could concern, for example, a default on the mortgage related to the property before the sale. You are looking for a property in Montreal with your real estate agent. If you search online, the detailed property sheets are marked “sale without legal warranty of quality, at the risk and peril of the buyer. Since you are not sure about the meaning of these terms and their implications, ask your real estate agent for more information. (2) from a more subjective point of view, dealing with the identity of the buyers, their training and experience, in so far as those characteristics are relevant to the facts of the judicial procedure and the dispute … [13]. Selling without legal warranty is becoming increasingly popular and is a risky and risky practice.
Before selling, ask your real estate agent for an expert opinion on the subject that will guide you to the most informed decision. In the event that a hidden defect is discovered after the purchase of a house, in the absence of a legal warranty, no recourse against the seller is possible, except in rare exceptions that only your legal advisor can explain to you. The only way to bring back against a seller is to be able to prove that the seller knew about the defect at the time of the sale. If the seller is aware of a hidden defect, but has not revealed it during the sale even without legal warranty, he runs the risk of being prosecuted. In the event of construction defects, with or without legal warranty, the seller is obliged to disclose all problems of which he is aware. If he fails to do so, he can be prosecuted. However, since in many cases the seller does not actually live in the apartment, the known defects can be quite limited. The seller has no further obligation. Therefore, if a defect is detected after the purchase, the seller is not liable. Remember that the purchase of a property without legal warranty means that you buy the property in the state in which it is located, without the possibility of recourse against the seller in case of hidden defects. If you still want to complete the transaction, be sure to have the building inspected by a qualified professional and negotiate the price to compensate for your lack of recourse. However, the parties may agree otherwise.
Often, properties are for sale with the mention “without legal warranty”. In such cases, the buyer acquires the property at his own risk and waives in advance his right to take legal action against the seller in case of hidden defects. Often, the sellers of these properties are people with limited knowledge of the house, such as the executors of an estate. The purpose of a building inspection is to evaluate the interior and exterior of a property. In the case of a purchase without a legal warranty of quality, your real estate agent will strongly advise you to do a more thorough audit than usual to ensure that hidden imperfections or defects are revealed. In inheritance cases where the liquidator or heirs wish to sell the testator`s property, it is customary for the assets to be sold without legal guarantee, since the liquidator and/or heirs have not lived or lived in the property in question and have no knowledge of the condition of the property. If the legal warranty is excluded, you cannot sue the seller for problems due to hidden defects. Your only option would be to show that the seller hid the truth about a part of the sale that was important to you. In fact, this part must be so important to you that if you had known, you would not have bought the house.
– Senior sellers: Senior sellers often choose to sell their property without legal warranty to avoid liability as retirement approaches. They then move to a smaller house. A sale that takes place “at the risk and peril” of the buyer without a legal warranty of quality does not exclude the obligation of good faith that governs the contracts. The legal guarantee of quality exists by the sole operation of the law and any person who sells a building is required to guarantee its guarantee. It guarantees that the property is free from defects. In other words, the quality guarantee protects the buyer against “defects” that have not been revealed by the seller.
