Must You Disclose Patent or Latent Defects Selling in British Columbia?

If you know your house has a leak, rot or pests, you may wonder how much you have to tell a buyer. The answer starts with whether the problem is patent or latent.

This article explains those two terms and sets out the disclosure duty that British Columbia rules place on licensees acting for sellers.

This article covers the law of British Columbia.

Patent versus latent in plain words

A patent defect is one that is obvious or can be seen, such as a cracked window or a visibly stained ceiling. A latent defect is hidden, such as rot inside a wall.

The legal definition used for licensees turns on whether the defect can be discerned through a reasonable inspection of the property. A leak can be either kind, depending on what an inspection would reveal.

The distinction matters because the duties placed on a licensee are written around hidden problems that a buyer could not reasonably be expected to find alone. Even so, the label is not always obvious. Two homes with the same kind of leak can end up on different sides of the line, depending on where it is and what a careful inspection would show.

What the rules require

A licensee acting for a seller must promptly, and before any agreement is entered into, disclose known material latent defects to all other parties to the trade.

A material latent defect includes a defect that makes the property dangerous or potentially dangerous to occupants or unfit for habitation, a defect that would involve great expense to remedy, a circumstance for which a local government has given notice that it must be remedied, and a lack of appropriate municipal building and other permits.

These licensee rules deal with material latent defects. How patent defects, or less serious problems, are treated can depend on the contract and the facts, so it is worth confirming with a lawyer.

Applying it to leaks, rot and pests

• Active leak inside a wall: this may be hidden, and may be material if the repair would involve great expense or make the home unfit for habitation.
• Rot found behind finishes: likely hidden. Whether it is material depends on danger and cost.
• Pests: whether they are material depends on the facts, so seek advice.
• Unpermitted work: a lack of appropriate permits is within the definition.

These are general illustrations. Whether a particular problem is material is a fact question.

Talking openly with your licensee

Before providing trading services, a licensee must disclose in the approved form whether they will represent you as a client. If a person is unrepresented, the licensee must also disclose the limited assistance available and recommend independent professional advice.

In practice, the earlier you tell your licensee what you know about the home, the more time there is to decide how to handle it. Repair records, inspection reports and contractor invoices can all help show what was done and when. A problem raised early is usually easier to deal with than one that surfaces after an offer is on the table.

Risks of staying quiet

A buyer who finds a concealed problem may bring a court claim. A proceeding generally must not be started more than 2 years after the claim is discovered. There is also a 15-year ultimate period, but if the defendant wilfully conceals the claim or misleads the claimant, the act or omission is treated as occurring on the discovery date.

Whether a claim would succeed depends on the facts, so it is worth confirming with a lawyer if a buyer raises a problem after the sale.

What to do next

• Write down every problem you know of, with dates and repair records.
• Tell your licensee about each one, including past leaks and pest treatments.
• Consider giving the buyer written disclosure of the defect, which can matter under the licensee rule.
• Collect permits for renovations, and ask about any missing ones.
• Speak with a lawyer if you are unsure whether a problem is material.

Frequently asked questions