Patent vs Latent Defects: What Sellers Disclose in British Columbia

You may know your home has a past leak, some rot or an earlier pest problem and wonder whether you have to say so. The answer depends partly on whether the problem is something a buyer could see, or something hidden.

This article explains the two terms in plain words and sets out what the Real Estate Services Rules say about hidden defects in British Columbia. It does not replace advice on your own situation.

This article covers the law of British Columbia.

Patent and latent: the plain-words difference

A patent defect is obvious or easy to find. A cracked window or a stained ceiling in plain view are examples. A latent defect is hidden, and a reasonable inspection would not uncover it.

The Rules use the phrase material latent defect and define it as a material defect that cannot be discerned through a reasonable inspection of the property. The line between the two is not always clear, and it can depend on what a reasonable inspection would have found.

What counts as a material latent defect

The definition expressly includes several situations:

• A defect that makes the real estate 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.
• A lack of appropriate municipal building and other permits.

So hidden rot behind a wall, a concealed leak causing damage, or unpermitted work could fall within the definition depending on the facts. A past pest issue that was fully dealt with is a different question, and it is worth asking a lawyer how it should be handled.

What your licensee must do

A licensee acting for a seller must promptly, and before any agreement for the acquisition or disposition is entered into, disclose known material latent defects to all other parties to the trade. The duty is about defects that are known, and it comes before the contract is signed.

If you instruct the licensee not to disclose such a defect, the licensee must refuse to provide further trading services to you for that trade.

The licensee does not have to disclose a defect to a party who has already received written disclosure of that defect from the selling client. Giving the buyer clear written disclosure yourself can therefore matter.

Separately, before providing trading services, a licensee must disclose, in the approved form, whether they will represent the party as a client. It is a good moment to ask your licensee how they handle defect questions.

Visible problems and the limits of what is covered here

The licensee duty above is about material latent defects. It does not by itself settle every question about visible problems, what goes on a property disclosure form, or what a court may decide in a dispute. Those depend on the facts, the contract and the law at the time, and a lawyer can confirm them.

Time limits if a buyer later says something was hidden

Problems can come to light after a sale closes, and a buyer who believes something was concealed may consider a claim. Whether a claim would succeed depends on the facts, and a lawyer can confirm how the law applies.

A court proceeding generally must not be commenced more than 2 years after the day the claim is discovered. Discovery is when the person knew or reasonably ought to have known that loss occurred, who caused it, and that a court proceeding is appropriate.

There is also an ultimate limitation period of 15 years from the act or omission. If the defendant wilfully conceals the claim or misleads the claimant, the act or omission is treated as occurring on the discovery date instead.

This is one reason clear records matter. If you can show what you knew, what you repaired and what you told the buyer in writing, any later discussion about what was disclosed is far easier to sort out.

What to do before you sell

• Write down every known problem, even if it was repaired.
• Collect repair invoices, permits and inspection reports.
• Check whether any local government notice is outstanding.
• Give your agent the full picture and provide any disclosure to buyers in writing.
• Speak with a lawyer if you are unsure whether a problem is material.

If a problem is borderline, do not guess. Bring your records to a lawyer before you list so that you know how to describe it.

Frequently asked questions