-Bank redemptions: If a landlord no longer pays his mortgage, a formal notice is sent and a court decision is rendered a few months later. The bank then takes possession of the property and proceeds with a direct sale. Buildings taken over by banks are always sold without legal warranty, because a bank does not want to be sued for latent defects. 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 abandonment? For a sale to take place without a legal warranty, this must be mentioned in the seller`s declaration or in the offer to purchase. This must also be indicated in the act of purchase. If you want to sell something without being held responsible for hidden defects, you must write that the item is “sold at the buyer`s own risk, without warranty against hidden defects” and not only that “this sale is without legal warranty”. According to article 1726 of the Civil Code of Quebec, the seller must guarantee to the buyer that the object sold is free of hidden defects. This is called a “quality guarantee”. However, article 1733 of the Civil Code of Québec allows an exception if “a seller who is not a professional seller” may release his liability if the buyer “purchases property at his own risk”. The TFSAPP – Key information The purchase of a home is an important investment that leads to one of the The phenomenon of selling without legal warranty has been observed for several years in real estate transactions in Quebec. However, this phenomenon has increased since 2019 during the pandemic.
Buyers may choose to waive the legal warranty to facilitate the acquisition of the coveted property. Sellers, on the other hand, sell their property without legal guarantees, thinking they will let go of their responsibility. But is it really a good idea? Some sellers choose to sell their property without legal warranty. However, in these following 3 situations, selling without legal warranty is the most common. You are looking for a property in Montreal with your real estate agent. If you search online, the detailed property sheets are marked “sale without legal warranty of quality, at the risk and peril of the buyer. Since you are not sure about the meaning of these terms and their implications, ask your real estate agent for more information. The quality guarantee concerns hidden defects. When we talk about latent defects, we are talking about a “hidden” defect that undermines the quality of the building. This defect is known to the seller and has been omitted from the seller`s declaration (VIS). In addition, the hidden defect existed at the time of purchase, but was unknown to the buyer.
Hidden defects are usually not easily detectable and can be, for example, mold in the walls, cracks in the foundation, moisture on the floor, water infiltration, etc. In the event that a hidden defect is discovered after the purchase of a house, in the absence of a legal warranty, no recourse against the seller is possible, except in rare exceptions that only your legal advisor can explain to you. The only way to bring back against a seller is to be able to prove that the seller knew about the defect at the time of the sale. If the seller is aware of a hidden defect, but has not revealed it during the sale even without legal warranty, he runs the risk of being prosecuted. In this case, you can use the legal warranty to force the seller to solve the problem at their expense. You can even cancel the purchase if the problem cannot be resolved. The exclusion of the legal quality guarantee gives you leverage to negotiate the selling price. Your real estate agent will represent you in negotiations with the aim of obtaining the property at the best price, which, depending on the situation and the context of the market, is likely to be lower than its value with the available benchmarks as well as the real estate cycle. A property sold without a legal warranty usually has the following wording: The seller has the possibility to exclude the legal warranty from the sale. Where applicable, the promise to purchase and the deed of sale must clearly indicate that the sale is “without warranty, at your own risk”.
Therefore, you may not be “surprised” by this clause. A sale without legal warranty means that the buyer agrees to purchase and renounce the property at his own risk. This means that in the event of hidden defects, recourse against the seller is limited, hence the importance of pre-purchase inspection. The seller must always indicate past defects and complications with the property and must act in good faith to be transparent. The buyer must read it, but understands that he has no guarantee of the quality of the property.