Real Estate – Sale of House – Failure to Disclose Defect – Patent or Latent Defect
Real Estate – Sale of House – Negligent Misrepresentation
The plaintiff entered into an agreement to purchase a residence owned by the defendants. Within a month of taking possession, the plaintiff found water leaking from a crack in the west concrete wall of the basement. The wall had been covered by gyprock. A few months later, another substantial leak occurred where there was a crack in the south wall of the basement. The plaintiff began this action for damages claiming that the defendants had either negligently or fraudulently misrepresented the condition of the house when they stated in a Property Condition Disclosure Statement (PCDS) that they were not aware of any leaks, moisture or water problems, or any past or present flooding or drainage problems and they failed to inform the plaintiff that they had recently done work to the property to conceal and/or correct the water leakage issues, thus inducing him to purchase. The action proceeded under Part 40 of the former Queen’s Bench Rules through affidavit evidence. The plaintiff deposed that he had hired a home inspector who conducted a visual inspection of the house and advised in his report that along the exterior north wall the grade was fair and by the south wall, it drained toward the house. He suggested that the grade around the house needed to effectively shed water away from the foundation. He noted that the condition of the foundation concrete was good but there were common cracks, which he described as minor or moderate. The south wall had a deflection of 1 to 2 inches and would probably have a horizontal crack and recommended bracing it. The west wall had a minor horizontal crack and deflection. He commented that there was minor seepage but did not mention its location. The condition of the floor was described as good with common cracks, as was the weeping tile pit and the floor drain. The plaintiff inspected the house himself on three occasions with the inspector and with his realtor. He then signed a Notice to Remove Conditions, which had been part of his offer to purchase, and stated that inspections were satisfactory and the Property Condition Disclosure Statement was acceptable. The leak in the west wall occurred in a room that had been used by the defendants as a bedroom for their children. They had installed carpet and drywall in it, neither of which showed any water damage. The room had been created in 2003. In the statement, they had indicated that there had not been any water leakage in that room nor any water seepage in the basement nor were they aware of any structural defects.
HELD: The court dismissed the claim. The court accepted the evidence of the defendants. It found that the defendants had not made any false, inaccurate or misleading statements and had not acted negligently in answering the questions on the PCDS as they did and had not remained silent about problems, since they had no knowledge of them. The plaintiff had not relied upon the statements made in the PCDS because he hired a home inspector who revealed the patent defects.