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

May 30, 2025


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.

Related Terms

Additional Terms

Soil Conditions

Soil conditions refer to the physical and chemical properties of soil on a given property, including composition, stability, moisture retention, and. more

Sales-To-New-Listings Ratio (SNLR)

The Sales-To-New-Listings Ratio (SNLR) is a real estate metric that compares the number of homes sold to the number of new listings in a given period.. more

Market Type

Market type refers to the classification of a real estate market based on supply, demand, and pricing trends, typically categorized as buyer’s,. more

Outparcels

Outparcels are stand-alone commercial properties located near or on the outer edge of a larger retail or shopping centre complex.. more

Halo Effect

The halo effect in real estate refers to the positive influence that a popular or high-end development has on the surrounding property values and. more

Sump Pump

A sump pump is a mechanical device installed in the lowest part of a basement or crawl space to remove accumulated water and prevent flooding.. more

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