Another Leaky Basement

Cases regarding leaky basements are quite common. In this case, the new owner was not successful in claiming damages against the former owner.

A summary of the law in this area: Where there is a hidden or latent defect, the new owner may have a claim against the previous owner. However, it is up to the new owner to prove the previous owner knew about the defect or problem. The seller has a duty to disclose known defects that are hidden or latent. Failure to do so constitutes misrepresentation and leads to a successful claim by the buyer.

In this recent Ontario case, the new owner peeled back wall paneling in the basement and discovered cracks in the bricks of the foundation, water mould and mildew. However, there was no evidence on the outside portion of the wall paneling so the problem was not apparent during inspections of the house. In this case, the Court took note of the fact the defendants only owned the home for a short time. Given the presence of the mould or mildew, it was obvious this problem had been in existence for quite some time. The Court found that the level of water could have been there for a long period of time without ever showing up in the visible portion of the basement.

On this basis, the Court made a determination there was no act of concealment and hence no misrepresentation on the part of the seller. In this case, the buyer was stuck with a leaky, mouldy basement and no remedy.