The Real Estate Council of British Columbia defines a material latent defect as a “… defect that cannot be discerned through a reasonable inspection of the property, including any of the following:
(a) A defect that renders the real estate
(i) Dangerous or potentially dangerous to the occupants,
(ii) Unfit for habitation, or
(iii) Unfit for the purpose for which a party is acquiring it, if
(A) The party has made this purpose known to the licensee, or
(B) The licensee has otherwise become aware of this purpose;
(b) A defect that would involve great expense to remedy;
(c) A circumstance that affects the real estate in respect of which a local government or other local authority has given a notice to the client or the licensee, indicating that the circumstance must or should be remedied;
(d) A lack of appropriate municipal building and other permits respecting the real estate. “
Examples of material latent defects could be structural issues, grow-ops, plumbing problem, underground oil tanks, asbestos insulation, lack of permits for the real estate, or something has to be remedied (the seller has received notice from municipality), etc.
Unpleasant history of a property is out of the above list. Even though many buyers will avoid purchasing a stigmatized property where there has been murders, suicides, alleged hauntings, and gang violence. Unlike material latent defects, there is no legislation that defines and deals with this kind of issue, in BC. The Seller isn’t required to disclose any unpleasant history of the property, unless the buyer inquiries.
More discussions on material latent defects will come up soon.