- A home inspection is not a pass or fail test, and the buyer's options include asking for repairs, a lower price, or walking away if the agreement allows.
- The default rule is buyer beware, but sellers can be liable for hiding defects.
- A buyer generally has two years from discovering a claim to sue.
A buyer's inspection report lands with a list of problems and a request for repairs or a lower price. It can feel like a demand, but in most cases it is the start of a negotiation.
Your obligations depend mainly on your agreement of purchase and sale and on whether you disclosed or concealed anything. This article explains the usual options and where real legal risk arises.
What an inspection result means
Ontario's guidance describes a home inspection as not a pass or fail test. After an inspection, a buyer may ask the seller for repairs, accept the defect, ask for a lower price, or decide not to buy. Buyers are also advised to get their own inspection even if the seller has one.
A request is only a request.
Your options as the seller
- Agree to repair the items, with the work and any deadline written into an amendment to the agreement.
- Offer a price reduction instead of repairs.
- Offer a smaller compromise, such as fixing the most serious items only.
- Decline, and let the buyer decide whether to proceed.
If the buyer's condition gives them sole and absolute discretion, that is still read together with any duty in the agreement to act in good faith and with due diligence. Whether a buyer can simply walk away therefore depends on the exact wording of the condition.
Get any change in writing. A verbal promise to fix something is easy to dispute later.
Buyer beware, and its limits
Caveat emptor, meaning buyer beware, is the default rule. Where the contract leaves a risk with the buyer, a court will not shift it to the seller. In Lee v. 1435375 Ontario Ltd., a commercial sale involving a zoning mistake, the Court of Appeal for Ontario found that the buyer had implicitly assumed the zoning risk and had not protected himself.
There is an important exception for concealment. Sellers can be liable for hiding defects. In one Court of Appeal case, the trial judge found the sellers liable for non-disclosure and concealment of water damage, and responsibility was split 70% to the agents and 30% to the sellers.
If you know of a serious issue, talk to a lawyer before you list or respond to the report.
How long a buyer has to bring a claim
| Rule | What it says |
|---|---|
| Basic period | A buyer generally has two years from the day the claim was discovered to sue. |
| When a claim is discovered | The earlier of the day the buyer knew, or a reasonable person ought to have known, of the injury, its cause, who caused it, and that a lawsuit would be appropriate. |
| Ultimate limit | No claim can be started after the 15th anniversary of the act or omission. |
| Wilful concealment | The 15-year period does not run while the defendant wilfully conceals the injury or its cause. |
A limitation period applies despite any agreement to vary or exclude it, with limited exceptions for business agreements where no party is a consumer.
What to do next
- Read the report and sort the items into serious, minor and cosmetic.
- Check your agreement for the inspection condition, its deadline and its wording.
- Review what you knew and disclosed about each item, and keep records of past repairs.
- Decide whether to repair, reduce the price or decline, and put any deal in writing.
- Speak to a real estate lawyer before responding if the report points to water damage or any problem you knew about.
Frequently asked questions
Do I have to fix everything in the inspection report?
Not automatically. Ontario's guidance describes a home inspection as "not a pass or fail test", and after one a buyer may ask the seller for repairs, accept the defect, ask for a lower price, or decide not to buy. How far the seller is bound by anything beyond the signed agreement depends on your situation, so it is worth confirming with a lawyer, and the inspection itself is not a pass or fail test.
Can I be sued after closing for a problem the buyer missed?
The default rule is buyer beware, and a court will not shift a risk the contract left with the buyer. Sellers can still be liable for hiding defects. Whether a claim would succeed depends on the facts.
How long can a buyer wait before suing?
A buyer generally has two years from the day the claim was discovered. There is also an outer limit of 15 years from the act or omission, subject to exceptions such as wilful concealment.
Does a new condo buyer have different rights?
Yes. Buyers of new or pre-construction condos have a 10-day right to cancel, while no law sets a period for cancelling a resale condo purchase without penalty.
Sources
- Court of Appeal for Ontario – International Property Group Inc. v. 2262814 Ontario Ltd., 2016 ONCA 203 — ontariocourts.ca
- Ontario.ca – What to know before buying a home — ontario.ca
- Court of Appeal for Ontario – Lee v. 1435375 Ontario Ltd., 2013 ONCA 516 — ontariocourts.ca
- Court of Appeal for Ontario – Bowman v. Martineau, 2020 ONCA 330 — ontariocourts.ca
- Limitations Act, 2002, S.O. 2002, c. 24, Sched. B (e-Laws) — Ontario e-Laws
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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