What Buyer Beware Means for Home Sellers in British Columbia

You may have heard the Latin phrase caveat emptor, usually translated as buyer beware. Many sellers take it to mean that once a home is sold as it stands, the buyer carries every risk. That is only part of the picture.

This article explains in plain terms how buyer beware is commonly understood, where it stops for sellers in British Columbia, and what the rules for real estate licensees say about hidden problems. It is general information, not advice on your own sale.

This article covers the law of British Columbia.

What buyer beware means in plain words

Buyer beware is the idea that a buyer is responsible for checking what they are buying. In a home sale, that points to inspections, questions and reading the paperwork before committing. Whether a seller must point out a particular problem depends on the facts and the contract, so it is worth confirming with a lawyer. The rules for real estate licensees, covered below, do set out a specific disclosure duty for known hidden defects.

It is not a blanket shield. How far it protects you depends on what you knew, what you said, what you did and how the contract is worded. Those facts are why a lawyer's review matters when a dispute is possible.

Where the protection stops: hidden defects

The Real Estate Services Rules define a material latent defect as a material defect that cannot be discerned through a reasonable inspection of the property. The definition includes a defect that makes the home 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.

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. So even if the general idea favours sellers, the person representing you has their own disclosure duty.

There is an exception. The licensee need not disclose a defect to a party who has already received written disclosure of that defect from the selling client.

What happens if you tell your agent to stay quiet

If a seller instructs the licensee not to disclose a material latent defect, the licensee must refuse to provide further trading services to that client for the trade. In practice, asking your agent to hide a known serious problem can end the agent's work on your sale.

Staying silent also carries risk beyond the agent relationship. The ultimate limitation period for a claim is 15 years, but if a defendant wilfully conceals the claim or misleads the claimant, the act or omission is treated as occurring on the discovery date. That can leave a seller exposed to a buyer's claim for longer than expected.

Other rules that shape a seller's risk

• Your listing agreement should be in writing, signed by you and an authorized signatory of the brokerage, unless you waive the writing requirement.
• Contracts respecting land generally need to be in a signed writing, or be shown by conduct such as paying or accepting a deposit.
• A claim in court generally must start within 2 years after the day it is discovered, and discovery means when the person knew or reasonably ought to have known of the loss, who caused it, and that a court proceeding is appropriate.
• Whether a buyer can sue over a particular problem turns on the facts and the contract, so it is worth getting advice if one is threatened.

Reports of what a seller must put on a property disclosure form, and how the courts treat sellers who conceal problems, vary with the facts. A lawyer can confirm what applies to your situation.

What to do before you list

• List every problem you know about, including leaks, rot, past pest issues and work done without permits.
• Gather permits, inspection reports and repair invoices.
• Tell your agent about known serious problems early, rather than waiting for an offer.
• Provide written disclosure of any defect to buyers, which can matter under the licensee exception.
• Ask a lawyer to review the contract if you are unsure whether something counts as a latent defect.

Frequently asked questions