Latent Defect

Learn what a latent defect is in Canadian real estate, when sellers must disclose it, and how buyers can protect themselves during inspection and purchase.

Latent Defect



What is a Latent Defect?

A latent defect is a hidden flaw in a property that is not visible during a typical inspection and may affect its safety, use, or value.

Why Do Latent Defects Matter in Real Estate?

In Canadian real estate, sellers are legally obligated to disclose known latent defects that make the home unsafe or unfit for habitation. These cannot be easily detected by the buyer or inspector.



Examples of latent defects include:
  • Mold behind walls
  • Foundation cracks or structural instability
  • Undisclosed water damage or past flooding



If the seller fails to disclose a known latent defect, they may face legal consequences. Buyers should include inspection conditions and seek professional advice for potential red flags.



Understanding latent defects protects buyers from surprise repairs and helps sellers meet legal disclosure obligations.

Example of a Latent Defect

After moving in, the buyer discovered black mold behind the drywall. The seller had not disclosed it, resulting in a legal claim for latent defect.

Key Takeaways

  • Hidden flaws not visible in standard inspection.
  • Must be disclosed if known.
  • Can affect safety or habitability.
  • May lead to legal action if concealed.
  • Strong reason for buyer due diligence.

Additional Terms

Construction Loan

A construction loan is a short-term, interim financing option used to fund the building or major renovation of a property, with funds disbursed in. more

Certificate of Occupancy

A certificate of occupancy is an official document issued by a municipal authority confirming that a building complies with applicable codes and is. more

Bylaw Variance

A bylaw variance is official permission granted by a municipal authority allowing a property owner to deviate from local zoning or building bylaw. more

Absorption Rate

Absorption rate is a metric that measures the rate at which available properties are sold or leased in a specific market over a given period.. more

Corporate Restructuring

Corporate restructuring refers to the reorganization of a company’s operations, assets, or liabilities, often under court supervision, to improve. more

Consumer Proposal

A consumer proposal is a formal, legally binding agreement in Canada between an individual and their creditors to repay a portion of their debt over. more

More For You

Toronto City Council Waives Development Charges On Sixplexes
Shutterstock

At yesterday's session, Toronto City Council adopted a motion from Mayor Olivia Chow to exempt all units in sixplexes from costly development charges and parkland dedications. Chow's recommendation upped the ante on a previously proposed motion from Councillors Jamaal Myers (Ward 23 - Scarborough North) and Josh Matlow (Ward 12 - Toronto-St. Paul's) seeking to eliminate these fees for the first four units in a multiplex.

"I would like to thank Councillors Myers and Matlow for bringing forward this item to make it easier and more affordable to build sixplexes in our City," read a letter from Chow submitted under the item on Tuesday. "[...] As a City, we can do even more to make these projects viable. For that reason, I am recommending we go further and exempt all units in a sixplex from development charges."

Keep ReadingShow less
​Slate & Ash by Pennyfarthing set for Ash Street in Vancouver.

Slate & Ash by Pennyfarthing set for Ash Street in Vancouver. / Pennyfarthing

In February, the BC Financial Services Authority (BCFSA) announced a new pilot program that would extend the "early marketing period" for large presale projects, in an attempt to give developers more time to get the presales they need to secure construction financing and get shovels into the ground.

Under the Real Estate Development Marketing Act (REDMA), developers are required to secure their building permit 12 months after they file the disclosure statement that allows them to begin selling their project. Generally, lenders require developers to sell somewhere between 60% to 80% of the units with a certain profit margin for construction financing.

Keep ReadingShow less
Airy Refinement Abounds At This Vancouver Family Home

In Vancouver’s Arbutus neighbourhood — where quiet charm meets central convenience — homes of 2318 Oliver Crescent's calibre rarely come to market.

Set on an exceptionally deep 8,550-sq.-ft lot, this timeless family home combines spaciousness, functionality, and thoughtful design. The address offers nearly 4,800 sq. ft of interior living space, and is framed by mature landscaping, a fully fenced yard, and a backyard built for both play and restful pause.

Keep ReadingShow less
Striking Alberta Home Brings Modern Opulence To The Alpines

In the rugged heart of Alberta’s Bow Valley, where wilderness meets refined living, 118 Cairns Landing stands as a rare expression of mountain luxury.

Located within Cairns Landing — Canmore’s only gated community — this estate spans more than 25,000 sq. ft of pristine alpine land and captures uninterrupted views of the Three Sisters, Ha Ling Peak, and the Fairholme Range. It’s a property that offers solitude and grandeur in equal measure, just minutes from downtown Canmore and framed by the edge of Banff National Park.

Keep ReadingShow less
Mizrahi To Renegotiate Presale Contracts For Ottawa Project In Restructuring
1451 Wellington Street West as of October 2024/Google Maps

Around nine months after filing for creditor protection, Mizrahi Development Group is now looking to renegotiate presale contracts with respect to its luxury condo development at 1451 Wellington Street West in Ottawa, also known The Residences at Island Park Drive.

The 12-storey, 93-unit development coming up in Westboro, owned by WellingtonCo, was started back in 2015 and is now in the final stages of construction with just interior finishing and cladding and roofing work still to be done. To date, all the necessary permits and approvals for the project have been secured except the occupancy permit and condominium registration.

Keep ReadingShow less
​High-rise towers under construction in Burnaby in 2022.

High-rise towers under construction in Burnaby in 2022. / StandbildCA, Shutterstock

Around this time last year, something very interesting started to happen: developers across the country started to take aim at the development fees that governments levy on new construction and use to fund infrastructure projects. There has been varying levels of success, but what's undeniable is that there has been a sentiment shift around these fees.

Here in British Columbia, the story really begins in Fall 2023, when the Metro Vancouver Regional District (MVRD) revealed that it was raising its development cost charges (DCCs) — in some cases doubling or triping the existing rates — which vary depending on location and property type. Despite pushback from federal Minister of Housing Sean Fraser at the time, the MVRD approved the increases, but agreed to implement the increases in phases on January 1 of 2025, 2026, and 2027.

Keep ReadingShow less
“Prolonged Downturn”: GTA New Home Sales Down 80% From Historical Norm
Shutterstock

The Greater Toronto Area's (GTA) "prolonged downturn" in new home sales continued with its sloping trajectory in June, according to the latest data from Building Industry Land and Development Association (BILD) and Altus Group.

In a "near-historic low," just 510 new homes were sold last month, up from a measly 345 in May — however, that figure was higher than it was in any month since the beginning of the year. Still, June's sales remain 60% below June 2024 and 82% below the 10-year average. For reference, a typical June would have seen around 2,801 new homes sold — more than five times the sales recorded last month.

Keep ReadingShow less
“Prolonged Downturn”: GTA New Home Sales Down 80% From Historical Norm
This $4.7M Storybook Estate In Erin Is Built For Entertaining

Set high on a hillside in the rolling countryside of Erin, Ontario, 9255 Sideroad 27 isn’t just a home — it’s a fully realized estate.

Stretching across 46 acres of panoramic land, the property is an ultra-private retreat where English gardens meet classic architecture, and where every inch has been crafted for both grandeur and comfort.

Keep ReadingShow less