What Does Sale without Legal Warranty Mean

As a general rule, a house is sold without a guarantee of quality if it is liquidated by the estate or if it has been taken over, in which case the owner cannot guarantee the suitability of the house that did not live there. Seller is not bound by this warranty if it has informed Buyer of such restrictions at the time of sale, if a prudent and diligent Buyer could have discovered them due to the nature, location and use of the premises, or if such restrictions have been registered with the registrar. Many sellers think they can take advantage of this exception by adding the words « sold without legal warranty » to the purchase agreement. A recent Supreme Court decision (Sultan v. Gitman, JE 2009-1951) accepted a buyer`s claim against a seller for latent defects, although the contract contains the words « without warranty against latent defects. » Unfortunately, the court does not specify how a property warranty applies specifically to a violation of the law. While it is true that the deed of sale in this case does not provide much detail about the « actual nature » of the transaction (a copy of it was verified for this article), it would have been interesting to see whether the court`s decision would have been the same if the act had been more precise about the scope and intent of the « actual determination ». We were not able to review the initial offer to purchase, but it is quite common for Quebec real estate professionals to include very detailed « no warranty » language in their contracts. This decision seems to justify what some consider to be exaggerated language by lawyers when they specify the « current state » of a transaction. First, get support from a real estate agent who knows how to guide you to make an informed decision about the property you want. It will clearly tell you what options are available to you and how to make the most of the situation. You have finally found the house of your dreams.

The seller insists on selling without legal warranty at your own risk. What is a legal warranty? What are the consequences of giving it up? In the event of design defects, with or without a legal warranty, the seller is obliged to disclose all problems of which he is aware. If he does not, he can be prosecuted. However, as in many cases the seller does not really live in the apartment, the known defects can be quite limited. The seller has no other responsibility. Therefore, if a defect is detected after the purchase, the seller is not responsible. Be very careful and on your guard when it comes to this type of real estate sale. By hiring a Sutton real estate agent, you ensure you have the support and help you need to make your home buying project a success. Evaluate your willingness to take legal action, as it will cost a lot of time and money. If you tend to avoid conflicts, think twice about what could happen if the transaction becomes acidic. On October 23, 2018, the Supreme Court of Quebec issued a decision1 that could have a significant impact on the interpretation of « actual » sales in Quebec.

According to article 1726 of the Civil Code of Québec, the seller must guarantee to the buyer that the item sold is free of hidden defects. This is called a « quality guarantee ». However, article 1733 of the Civil Code of Québec provides for an exception if « a seller who is not a professional seller » may waive any liability if the buyer « buys property at his own risk ». It therefore concluded that the vendors were responsible for the non-compliance issues arising from the 2001 work. With respect to the 2006 work, the court found the tenant liable for the non-compliance issues, as he had violated the terms of his lease with respect to the execution of the work. The court ruled that the vendors were not liable for the irregularities resulting from the 2006 work, as it was not established that the work had been completed prior to the sale. « At the risk of the buyer » are scary words and it`s important to understand what exactly they mean. Here are some important points you need to know about selling without a legal warranty. These are hidden defects of a property (known or unknown to the seller) that were not mentioned at the time of sale. Yes, the seller can exclude the legal warranty. The offer to purchase must indicate that the sale is made « without legal warranty, at your own risk ». JLR.caOACIQ – Articles 122929, 200145, 202655, 203686, 208302, 208364Jamie Benizri, Legal Logic – Guest ArticlesEducaloi – Real Estate: Buy without legal warranty Professional sellers can never be released from their liability for defects that were known to them or that could not be unknown and that they have not disclosed.

Careful! This means that if a sale is made without warranty and the seller is not a real estate sales professional, the transaction is entirely at the buyer`s own risk. In 2006, Foncière St-Jacques Inc. (the buyer) acquired a building from George Weisz and Robert Wasserman (collectively, the sellers). The building was sold for $3,125,000 and without warranty, « except for the property guarantee. » After the sale, the buyer argued that the work carried out in 2001 and 2006 by a tenant (the tenant) on the building prior to the sale did not comply with the Cultural Heritage Act (Act). The buyer filed a claim for damages of $800,000 against the sellers and the tenant to carry out the work necessary to bring the property into compliance with the law. For example, if you discover major foundation or insulation issues that the seller did not mention during the sale, you will have to live with the consequences. This means that you waive your right to sue the owner for hidden defects. The court`s interpretation of Article 1725 of the CCQ was that a buyer who knows that there could be a public law restriction on a property does not automatically exempt a seller if there is indeed a violation of public law. This practice is mainly practiced in the case of property that we may have received as an inheritance or otherwise and in which we would not have lived and for which we have very little information. However, this is an upward trend, including for « normal » single-family homes. Indeed, in the first months of 2021, 32% of sales of « ordinary » single-family homes in Quebec were made without legal warranty, according to the JLR study.

This represents an increase of 6% compared to 2020 and 15% compared to 2014. However, the parties may agree otherwise. Often, real estate with the indication « without legal guarantee » is for sale. In such cases, the buyer acquires the property at his own risk and waives in advance his right to take legal action against the seller in the event of hidden defects. Often, sellers of such properties are people with limited knowledge of the house, such as liquidators of an estate. As for the validity of the title, the Quebec system of publishing rights is quite reliable and the notary will carry out the same checks whether the sale is made with or without legal guarantee. At this level, the risk is therefore rather low. If you wish to sell something without being held responsible for hidden defects, you must write that the item is « sold at the risk and peril of the buyer, without any guarantee against hidden defects » and not only that « this sale is made without legal guarantee ». However, apart from the financial risk, the sale price could be traded downwards compared to similar properties. So, go ahead and hone your sales skills. The court quickly rejected the sellers` argument that the notice sent by the buyer regarding the breach of public law was too late and concluded that the sellers were aware of the non-compliance issues of the building prior to the sale. The court also concluded that when the property was purchased, the buyer did not have the opportunity to know all the violations of public law related to the work carried out in 2001, even though he knew that the property was subject to certain public law restrictions.

What is particularly worrying about this decision is that we must now be aware that a guarantee can go far beyond what is only provided for in terms of title. If the court finds in this case that it is the « right of ownership », what else could be covered? Whether it`s zoning issues, building code violations or fire safety requirements or other issues that we don`t normally think are covered if only a guarantee is given for the property? The guarantee of the right of ownership concerns defects of ownership. This could, for example, refer to a default in the mortgage related to the property before the sale. In return for the risk assumed by the buyer, the sale price is generally lower than that of a comparable property. Thus, buyers who agree to take an additional risk benefit from a discount. So, what risks are buyers exposed to? However, this exception is not faultless. If the seller did not mention the hidden defects of which he was aware or should have been aware, you can always take legal action. Now, the interesting part of the decision: the court breaks down the meaning of « a sale without warranty, with the exception of the guarantee relating to the property » and concludes that in such a sale, although the seller does not guarantee the quality of the property, he guarantees the « right of ownership ». In any case, the seller is legally obliged to declare all known problems of the property with or without legal warranty. You have finally found the house of your dreams, but it is sold without legal guarantee? Should you buy it anyway? SSQ Insurance will tell you a little more about this clause and what to do in this situation.

If the legal warranty is excluded, you cannot sue the seller for problems due to hidden defects. Your only option would be to show that the seller was hiding the truth about a part of the sale that was important to you. In fact, this part must be so important to you that if you had known, you wouldn`t have bought the house. .