A seller in Alberta fails to disclose a known latent defect in the property. What is the seller's potential liability?
Correct Answer
C) The seller may be liable for fraudulent or negligent misrepresentation for failing to disclose known latent defects
While Alberta generally follows 'buyer beware' (caveat emptor) for patent defects, sellers have a legal duty to disclose known latent defects — defects that are not visible and could not be discovered through reasonable inspection. Failure to disclose known latent defects can result in liability for fraudulent or negligent misrepresentation.
Why This Is the Correct Answer
Although Alberta generally follows caveat emptor for patent defects, sellers have a common law duty to disclose known latent defects — hidden issues not discoverable through reasonable inspection. Failure to disclose constitutes fraudulent misrepresentation (if intentional) or negligent misrepresentation (if careless), exposing the seller to court-ordered damages.
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Previous Question
A buyer submits an offer on an Alberta property with a condition for financing approval within 5 business days. On the 4th day, the buyer decides they no longer want the property but have received financing approval. Can the buyer use the financing condition to exit the contract?
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A seller in BC provides a Property Disclosure Statement that fails to disclose a known latent defect. After completion, the buyer discovers the defect. What is the buyer's most likely legal recourse?