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ccording to the Quebec Civil Code that came into force in 1994, a latent defect is one that was not apparent to ".a prudent and diligent buyer without any need of expert assistance.." during a normal inspection of the property. In the Code Civil du Bas Canada that was in force until the end of 1993, the Purchaser was presumed to have access to expert assistance.

As you can see, there is a difference. In the current code, the Purchaser's inspection is adequate, whereas in the previous code, it was incumbent upon the Purchaser to hire a competent inspector or to live with the consequences. In this way, the burden of responsibility for a latent defect has shifted towards the Vendor. To understand what this means, we must start by understanding what a latent defect is.

Latent means present but not apparent, not developed, dormant. In this marvellous bilingual culture, latent translates into French as caché, secret as well as latent, and the first one is more commonly used. Rebounding from the official French into the unofficial English, it becomes hidden. The problem with the word 'hidden' with respect to a defect is that there can be a presumption of intent because the word hidden derives from the active verb 'to hide'. A latent defect should not be understood to be a 'hidden' defect in that sense. What is meant is a defect that could not be or was not known to the Vendor and therefore was equally hidden from both parties.

A defect is not hidden, and therefore is apparent, as long as the Purchaser is made aware of it prior to committing irrevocably to purchase. Surprisingly, defects, whether latent or not, can be harder to define. Some jurisdictions try to define them and to develop a system to cost them and deduct them from the price of the house. In Quebec, there is a vague distinction between a major and a minor defect but generally the interpretation lies with the parties. Often a defect is subjective in nature, and in such a case, the parties may not agree. An example of this is the discovery that an important room has been finished in a material that is conventionally accepted, but to which the purchaser is chronically allergic.

The onus is on the Vendor to make the Purchaser aware of any defect that could otherwise be considered latent or hidden. In order to do so, he should give the Purchaser every opportunity to examine the property. Unfortunately, when trying to settle a difference after the fact, Vendors are often accused of having hidden a defect. The truth, most often, is that neither party had the competence to recognise the defect prior to consummating the transaction. For that reason a professional inspection is an important element in any purchase.

When having such an inspection done, however, the parties will be confronted with the problem of defining what constitutes a defect and how to cost it. One way we have found to accomplish this is to allow the Purchaser a defined period of time to cancel the transaction. In exchange, it is expressly understood that the period is for the purpose of having a professional inspection done by a competent inspector of the Purchaser's choice. Subsequently he or she may either cancel the transaction with minimal cost or proceed in full knowledge that the opportunity to have the property thoroughly examined had been provided. By this means, the warranty against latent defects is reduced by virtue of the presumed competency of the inspector. At the same time both parties can choose to disagree and cancel the transaction at minimal cost. Usually, though, what happens is that both parties have a clear relationship and the signing at the notary becomes a pleasant formality.

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