The words “with or without legal warranty” change how certain risks are allocated between seller and buyer. They do not replace complete seller disclosures, the buyer’s inspection or legal advice when the situation is complex.
Key takeaways
- In Quebec, the legal warranty of quality normally applies without having to be added.
- Generally, the defect must be sufficiently serious, exist at the time of sale, be unknown to the buyer and not be apparent through a prudent and diligent examination.
- With the legal warranty of quality, the seller may face a claim if the applicable criteria for a latent defect are established, even if the seller says they did not know about it.
What is the legal warranty of quality?
In Quebec, the legal warranty of quality normally applies without having to be added. It protects the buyer against certain defects that make the property unfit for its intended use or reduce its usefulness so substantially that the buyer would not have purchased it, or would not have paid the same price, if aware of them.
This warranty is not a promise that a resale property is perfect. Age, normal wear, disclosed defects and issues a prudent buyer could have observed or had identified must be distinguished from a true latent defect.
When can a problem qualify as a latent defect?
Generally, the defect must be sufficiently serious, exist at the time of sale, be unknown to the buyer and not be apparent through a prudent and diligent examination. The analysis is fact-specific: the same issue may be treated differently depending on disclosures, visible signs, inspection and transaction circumstances.
An issue already disclosed, clearly visible or identified in an inspection report is normally no longer “hidden” from the buyer. The seller must disclose important facts they know and answer accurately in the seller’s declarations regarding the property.
Selling with legal warranty: what does it mean for the seller?
With the legal warranty of quality, the seller may face a claim if the applicable criteria for a latent defect are established, even if the seller says they did not know about it. Knowledge of the defect may nevertheless affect certain legal consequences.
The best prevention is to document the property’s history through accurate disclosures, invoices, reports, permits, claims, water events, corrective work and recommendations received. A pre-listing inspection or targeted assessment may also be considered depending on the property, without replacing the duty of transparency.
Selling without legal warranty: what does “at the buyer’s risk” mean?
The parties may agree to exclude the legal warranty of quality, but the wording is decisive. According to OACIQ, a complete exclusion stating “without any legal warranty, at the buyer’s risk” is a serious warning and may also interrupt claims based on warranties provided by previous owners.
A sale without warranty does not authorize the seller to mislead the buyer or intentionally conceal an important fact. OACIQ also notes that wording may exclude only the immediate seller’s warranty while preserving certain rights against previous sellers. Because the effects are significant, tailored wording should be validated by a legal professional.
How can this affect price and the buyer’s decision?
A warranty exclusion does not automatically determine a specific discount. It adds risk that the buyer should assess alongside price, building age, document quality, inspection, foreseeable work and the financial capacity to absorb an unexpected expense.
For the seller, an exclusion may reduce certain future claims, but it may also narrow the buyer pool or influence offers and lender requirements. The strategy should therefore be chosen for the specific file rather than used automatically.
What should be done after discovering a significant problem?
The buyer should promptly document the situation, avoid non-urgent work that would prevent the seller from examining the issue, obtain appropriate expert opinions and notify the seller in writing within a reasonable time. Urgent action may of course be required to limit damage.
Liability and possible remedies depend on the facts, warranty clause, evidence and deadlines. A broker can transmit documents and direct the parties to appropriate professionals, but a lawyer or notary must provide case-specific legal advice. This article provides general information, not legal advice.