- Whether you can claim against a seller for a hidden defect depends on the facts and the wording of your agreement, so get advice early.
- A condition such as a satisfactory home inspection must be waived or performed by the agreed time, and once all conditions are waived the agreement is firm and binding.
- If the home is new, the Tarion warranty has its own coverage and claim deadlines that you should not miss.
You have moved in and then you find a serious problem: water in the basement, a failing foundation, a hidden repair, or something the seller never mentioned. You wonder whether you can hold the seller responsible or whether it is simply your risk as the new owner.
The answer is rarely simple. This article explains the questions that matter and the steps to take now. It does not predict outcomes, because they turn on the specific facts, the documents you signed and what the seller knew.
What a hidden defect is
In everyday terms, a hidden defect is a problem that was not apparent to you when you bought the home. A crack you could see on a walk-through is different from a concealed leak behind a finished wall. Whether a particular problem counts as a hidden defect in law depends on the facts, so it is worth confirming with a lawyer.
People often hear that buyers must beware. How far that idea goes, and when a seller can be held responsible for something they knew about or hid, is a legal question that turns on the facts and the contract. A lawyer can tell you how it applies to your situation.
Why your inspection condition matters
If your offer had a home inspection condition, it matters how you used it. Conditions such as a satisfactory home inspection must be waived or performed by the agreed time before the deal becomes binding, and they must be used in good faith.
Depending on how the condition is worded, if it is not met the buyer may terminate or the contract may end automatically, with the deposit returned. Once all conditions are waived, the agreement is firm and binding.
That is one reason a thorough inspection before you waive conditions is so valuable. If you waived the condition or skipped the inspection, it does not necessarily end your options, but it can affect them, so tell your lawyer exactly what happened.
If the home is new
For a new home, the Tarion new home warranty may apply. The one-year warranty starts on the date of possession, or the occupancy date for a condominium. The two-year warranty covers items such as water penetration and heating and electrical systems. The seven-year warranty covers major structural defects and runs to the seventh anniversary of possession.
Tarion has claim forms with set timelines. The Initial Form can be started 1 day after possession and is automatically submitted on day 41. The Year-End Form opens on day 183 and is automatically submitted on day 365, with a 10-day grace period if you have written proof you reported the items to your builder. The Second-Year Form can be filed any time in year two, and the Major Structural Defect Form after year two but no later than seven years from possession.
| Warranty period | What it generally covers |
|---|---|
| One year | Starts on the date of possession (occupancy date for a condominium) |
| Two years | Items such as water penetration, heating and electrical systems |
| Seven years | Major structural defects, to the seventh anniversary of possession |
Steps to take as soon as you find the problem
- Stop and photograph or video the problem before anything is repaired or covered up.
- Keep damaged materials if you safely can, since they may be evidence.
- Get a written report from a qualified inspector or contractor about the cause and cost.
- Gather your agreement of purchase and sale, any seller property information statement, listing materials and your inspection report.
- Write down what the seller or agents said about the issue, and when.
- Do not confront the seller or post accusations online until you have advice.
Take only the emergency steps needed to prevent further damage, and keep receipts. Time limits can apply to legal claims, so do not wait to speak with a lawyer.
What to do next
Put your documents in order and book time with a lawyer. They can read the agreement, look at what the seller disclosed, and explain whether a claim, a negotiated settlement or another route is realistic and worth its cost. Also ask your insurer whether the damage is something your policy responds to.
- Compare what the seller disclosed with what you found.
- Confirm whether the home is new and Tarion coverage applies.
- Ask about deadlines before spending money on repairs you may want to claim.
Frequently asked questions
Can I sue the seller for a defect they did not tell me about?
Sometimes a claim is possible, but it depends on the facts, such as what the seller knew and what your agreement says. A lawyer can review your documents and explain the risks and costs.
Does waiving my inspection condition end my options?
Not necessarily, but it can matter. Once all conditions are waived, the agreement is firm and binding. Tell your lawyer exactly what you did and when.
I bought a new build. Who do I call?
Start with your builder and look at the Tarion warranty. The warranty periods are one, two and seven years from possession, depending on the item. Tarion's claim forms have set timelines.
Should I repair the defect before talking to a lawyer?
Do what is needed to stop further damage, but document everything first and keep receipts. Major repairs can destroy evidence, so speak with a lawyer first if you can.
Sources
- RECO – Ask Joe: terms and conditions in a real estate offer — reco.on.ca
- Tarion – Coverage for Freehold, Contract, Condo Units & Condo Conversions — tarion.com
- Tarion – Claim forms & timelines — tarion.com
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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