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4 things you need to know about latent defects

Published on February 20, 2019

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Many home buyers get nightmares from thinking about the possibility of discovering a latent defect in their new home. But did you know that being well-informed on the matter and by taking certain precautions, you could reduce the chances of making such a frightening discovery, all the while being better prepared to face it? Here is some important information from the L’Unique General Insurance team.

  1. Adding Legal Access insurance to your home insurance can spare you a lot of hassles.
    Adding this type of endorsement is a precautionary measure that can spare you from many headaches should you find a latent defect. Available at an affordable price, this additional coverage will allow you to get legal advice and financial aid to defend your rights and settle the matter.
  2. Having the home inspected by a professional before purchasing is a smart move.
    Having the home you wish to purchase inspected before the transaction becomes official is optional. However, doing so would be in your best interest if a latent defect is discovered, as it demonstrates that you’re a cautious and careful home buyer, thereby increasing the likelihood that the defect is covered by a legal warranty under the law.

    Make sure the building inspector or the expert you hire has liability insurance. This way, you could be compensated if any errors or omissions are committed.

  3. Best not to consider homes without a legal warranty.
    Purchasing a home not covered by a legal warranty doesn’t give the buyer many options should a latent defect be discovered.
  4. If you do find a latent defect, you must proceed diligently to protect your rights.
    As soon as the defect is discovered, you should contact a lawyer, mediator or a representative from your Legal Access Insurance to help guide you through the procedure.

    In general, you should follow these steps to protect your rights:

    • Make sure the defect was not disclosed in writing before the purchase.
      Reread all the documents related to the purchase of your home such as the purchase offer, seller’s declaration, inspection report, etc.
    • Request an inspection to find out as much as possible about the defect.
      The inspection report should at least outline the source of the problem, the scope and extent of the damage, the amount of repair work required and the estimated cost of repairs.

      Good to know: The seller may cover the cost of the experts' fees if a latent defect is discovered.

    • Notify the seller of the situation by sending a letter within six months of discovering the latent defect.
      Give the seller the opportunity to assess the situation in person or sending an expert of his or her choice. Also, specify the actions you'd like the seller to take to rectify the problem.
    • Wait for the seller to reply to your letter before starting repair work on the defect.
      You must make sure the seller was notified of the defect, and that he or she had the opportunity to remedy the situation.
    • Put any out-of-court settlement with the seller in writing.
      Did you reach an out-of-court settlement? It's best to put it all in writing and make sure the document complies with your wishes before signing it. This type of document often includes a discharge which, once signed by both parties, settles the matter definitively.
    • Initiate legal procedures within three years of discovering a latent defect.
      If you can’t come to an agreement with the seller, you can take your case to court, but only if the latent defect was discovered during the three years preceding the start of legal procedures.

Your insurance broker is there to help you prevent losses. Feel free to contact him or her!

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