A Non-professional Seller who Sells a Property Without Legal Warranty at the Buyer’s Risk and Peril Need Not Disclose the Defects of Which He Was Aware Pursuant to Section 1733 C.C.Q.

This post, published on Éditions Yvon Blais’ blog on latent defects on March 10, 2017 (FR), discusses the recent judgment in Labrecque v. Petit (Full Text | Fiche Quantum) in which the Superior Court reminds us that a non-professional seller who sells a property without legal warranty, at the buyer’s risk and peril, need not disclose the defects of which he was aware pursuant to section 1733 of the Civil Code of Quebec (C.C.Q.). Specifically, the Court reminds us that a seller may exclude his liability under the legal warranty of quality and that, in such a case, he is not required to disclose the defects of which he was aware or could not have been unaware to the buyer.

In this case, the buyers, who acquired an immovable from the seller without legal warranty of quality, plead that their consent was vitiated by the seller’s fraud, who, according to the buyers, was aware of the defects affecting the property in question.

This decision reminds us of an important limitation to the seller’s exclusion of liability; even if the seller is not required to disclose the defects of which he was aware or could not have been unaware pursuant to section 1733 C.C.Q., the seller will nonetheless be liable if the buyer successfully demonstrates that the seller committed an intentional or gross fault, as stipulated in section 1474 C.C.Q.

Therefore, the seller who commits fraud or fails to disclose something to the buyer that objectively affects the value of the immovable, like the fact that a double suicide had occurred in the building, as in Fortin v. Mercier (Full Text | Fiche Quantum), will not be able to evade his liability to the buyer by invoking the legal warranty’s exclusion, even if he sold the immovable to the buyer at the latter’s risk and peril. In fact, the exclusion of warranty can be invalidated with proof of the seller’s intentional or gross fault. 

Therefore, while a seller who sells without warranty may avoid the application of the legal warranty of quality as permitted under section 1733 C.C.Q., he will not be able to avoid the application of the general rules on obligations and, specifically, the general laws on contracts, which permit a buyer to attack the sale on the grounds that his consent was vitiated by an error caused by fraud, all in accordance with the provisions of sections 1401 and 1407 C.C.Q.