What Does Buyer Beware Mean in British Columbia Real Estate?

You may hear that real estate in British Columbia is a buyer beware market. That phrase has some truth, but it is not a blanket shield for sellers.

This article explains the idea in plain words, then describes the disclosure duties that sit alongside it and where its limits tend to show up.

This article covers the law of British Columbia.

What buyer beware means

Caveat emptor is Latin for let the buyer beware.

The idea has limits. Statutes, professional rules and the facts of a sale can all reduce what a seller can rely on. The exact reach of the common-law rule depends on the circumstances, and a lawyer can confirm how it applies to a given sale.

The licensee duty that sits beside it

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.

This duty falls on the licensee. A seller who is working with a licensee should therefore expect the licensee to raise any known serious hidden problem with the buyer.

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. The licensee need not disclose a defect to a party who has already received written disclosure of it from the selling client.

What counts as a material latent defect

A material latent defect is a material defect that cannot be discerned through a reasonable inspection of the property. The definition includes:

• 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.

A problem a buyer could see on a reasonable inspection is generally a different category. Whether a given problem is hidden or visible often turns on the facts.

Where the protection runs out

Buyers who discover a concealed problem after closing may consider a court claim. A proceeding generally must not be started more than 2 years after 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. This is why concealing a known problem is risky for a seller.

What to do next

• If you are selling, list every problem you know about, including those you have repaired.
• Tell your licensee about known hidden problems early, and consider giving written disclosure to buyers.
• If you are buying, arrange a thorough inspection and ask for permit records.
• Keep records of repairs, notices and correspondence.
• See a lawyer promptly if you think a problem was concealed, because time limits apply.

Frequently asked questions