Caveat Emptor

What is Caveat Emptor?

Caveat emptor is a Latin phrase meaning 'let the buyer beware,' which places the responsibility on buyers to perform due diligence before completing a purchase.

Why Caveat Emptor Matters in Real Estate

In Canadian real estate, caveat emptor applies to property transactions, particularly resale homes. Unless fraud or misrepresentation occurs, sellers are not obligated to disclose all defects, especially visible ones.

Implications include:

• Buyers must inspect the property carefully
• Sellers must disclose only latent (hidden) material defects
• Home inspections are essential to minimize risk

While consumer protection laws have evolved, caveat emptor still plays a legal role. Buyers who waive inspection conditions may face greater exposure to post-sale issues.

Understanding caveat emptor emphasizes the importance of due diligence and professional inspections before finalizing a real estate purchase.

Example of Caveat Emptor

A buyer later discovers a leaky basement that was visible but not disclosed. Under caveat emptor, the responsibility lies with the buyer, not the seller.

Key Takeaways

• 'Let the buyer beware' principle.
• Buyers must inspect and investigate.
• Sellers only disclose hidden material issues.
• Still legally relevant in resale homes.
• Risk increases if inspection is waived.

Related Terms

• Home Inspection
• Material Defect
• Latent Defect
• Conditional Offer
• Buyer Risk