Buying a home or property can be an emotional and stressful experience. While real estate law in Toronto and across Canada is established to protect buyers and sellers, it is always helpful to have an understanding of one's rights before signing any contracts. What the buyer sees in the home may not be the whole truth, so it is a good idea to know what a seller must disclose and to ask many questions.
A good inspection may reveal the most obvious defects, such as plumbing issues or foundational concerns. However, a home may have latent defects, or those that a reasonable inspection do not reveal. Some of these latent defects may even rise to the level of stigma, which a buyer or seller cannot measure, but it exists nonetheless and may be an emotional deal breaker for the buyer.
One common example of a stigma is when someone died in the house. However, a death by natural causes may not be as challenging to overcome as a suicide or violent death. Additionally, some buyers may change their minds about a property if they learn it was once used for criminal activities such as drugs or prostitution, if the previous owner was a known criminal or if there are rumours that the house is haunted.
A seller is obligated by Toronto real estate law to disclose any latent defects that may have material consequences. However, the law is not as clear on stigmas since different people react differently to those factors. If a homebuyer has concerns about a stigma or other latent defect discovered after purchasing a home, it is a good idea to discuss the matter with a legal professional.