Definition
Under Quebec law (Civil Code of Quebec, art. 1726), the seller must guarantee the buyer that the property sold is free of latent defects. A hidden defect is one that: 1. Was unknown to the buyer at the time of purchase 2. Was not apparent during a reasonable examination 3. Is serious enough to have influenced the purchase decision or price 4. Existed before the sale (or was germinating before the sale)
Examples: water infiltration hidden behind recent finishes, concealed mold, masked foundation defects, undisclosed buried oil tank, pyrite in foundations.
Buyer's recourse: action for price reduction (reduction of sale price) or contract rescission (cancellation with refund + damages). Prescription period is 3 years from discovery of defect.
**Non-liability clause**: the seller can exclude the legal warranty against hidden defects, but must do so explicitly in the deed of sale. This clause is common in estate sales.