Is caveat emptor enforceable in real estate transactions?

British Columbia, Canada


The following excerpt is from HSL Investments Ltd. v 1027023 B.C. Ltd., 2018 BCSC 2228 (CanLII):

The law is not in dispute. Real estate transactions are generally subject to the doctrine of caveat emptor, meaning “let the buyer beware”, which denies the purchaser a remedy for certain defects and deficiencies in the quality of a property based on the rationale that the liability for determining those defects rests with the purchaser. In Fraser-Reid v. Droumtsekas, 1979 CanLII 55 (SCC), [1980] 1 S.C.R. 720, Mr. Justice Dickson, as he was then, stated the following at 723: Although the common law doctrine of caveat emptor has long since ceased to play any significant part in the sale of goods, it has lost little of its pristine force in the sale of land. In 1931, a breach was created in the doctrine that the buyer must beware, with recognition by an English court of an implied warranty of fitness for habitation in the sale of an uncompleted house. The breach has since been opened a little wider in some of the states of the United States by extending the warranty to completed houses when the seller is the builder and the defect is latent. Otherwise, notwithstanding new methods of house merchandising and, in general, increased concern for consumer protection, caveat emptor remains a force to be reckoned with by the credulous or indolent purchaser of housing property. Lacking express warranties, he may be in difficulty because there is no implied warranty of fitness for human habitation upon the purchase of a house already completed at the time of sale. The rationale stems from the laissez-faire attitudes of the eighteenth and nineteenth centuries and the notion that a purchaser must fend for himself, seeking protection by express warranty or by independent examination of the premises. If he fails to do either, he is without remedy either at law or in equity, in the absence of fraud or fundamental difference between that which was bargained for and that obtained.

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