Creekside View – January 27, 2025 – "Hidden Defects"

Caveat Emptor (Let the buyer beware) is a long-standing legal principle based on the premise that the buyer enters a transaction at his or her own risk.

It places the responsibility on the buyer to inspect or otherwise create terms in the agreement for sale regarding what is being purchased.

It is probably one of the more misleading concepts in real estate and a curtain that some sellers try to hide behind to explain away their unethical or dishonest behavior.

The courts state that sellers have duty to disclose a material fact not readily apparent when a property is viewed by a buyer.

I have encountered more than a few examples in my career.? Too many in fact.

In one case the seller chose to not disclose the submersible pump did not work in the water well.?

They maintained the slow recovery well would fill the cistern in the house when needed.

Turns they imported water to fill the tank, and didn’t use the well.

The buyer didn’t want to spend $600 on a well inspection and waived the condition, much to their later chagrin.

Another owner said they didn’t know the septic tank had been landscaped over (assumably by them?) causing it to eventually become full of solids which in turn led to the drainage field to seal up.

It came to their attention in the early summer when they discovered grey water on the surface of their back lawn.

A third had a wooden basement wall bow inward from the pressure of compaction equipment when the adjacent driveway was paved.

Their solution?? Build a false wall inside and hope no one notices.

I’m rather proud of finding this one.? There was an obvious deflection on the outside of foundation, and the buyer and I decided to compare the interior measurements to the outside.

I then reported our findings to the listing agent.

Eventually, to sell the house, the homeowner did the right thing and had the foundation professionally repaired.

Defects, whether hidden or not, are one of the most challenging aspects to our job as a realtor whether we represent the buyer or the seller.

Our clients, and frankly, the regulatory bodies who govern the conduct of the real estate industry, expect us to be alert to potential risks that may come with a property.

However, we are not home inspectors, surveyors, electricians, plumbers, pest exterminators, roofing contractors, or water well drillers.

So, competent agents ask lots of questions and listen closely to the answers.?

Resident sellers are requested to disclose what they know about the history of a property in a written statement.

Buyers are also shown a list of ancillary reports they can request, at their expense, when conducting appropriate diligence on a property and are encouraged to choose as many as they feel necessary.

Common sense and experience also help.

Just walking the exterior and interior of a property can tell you a lot, so I trust my “spidey” sense as well.?

In fact, that has saved me from embarrassment or a potential lawsuit more than once.

This is particularly important when representing an “as is condition” property such as those being sold after foreclosure or tax seizure when there is no information on the history of the property.

These I take extra time to go through before going public with its availability and often for this discovery walkabout I carry a strong flashlight and if in a rural location, a walking stick.

One house without electricity had several plastic gallon jugs full of clear chemical scattered throughout the cupboards and closets.?

Turns out they were some of the basic ingredients for a chemical lab, likely to be used in the production of methamphetamine.

Buried in the long grass outside a vacant truck shop on a commercial site was a two-foot opening into a 10’ deep septic tank.?

The only way I knew its location in the drifted snow was because the stick I was carrying broke through the hole in front of me first otherwise I may have not been here to tell the tale.

I wasn’t so lucky with a set of upside-down diamond harrows in an abandoned farm yard.? Still have the bruises on my legs from that tumble!

Vern McClelland is an associate broker with RE/MAX of Lloydminster, founder of ProgressiveTender.com, and an active partner in his family’s livestock operation.? Comments on this article are welcome either by emailing [email protected]? or calling (306) 821-0611.

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