THE SELLER'S LEGAL WARRANTY OF QUALITY IS CONDITIONAL UPON THE EXERCISE OF PRUDENCE AND DILIGENCE BY THE PURCHASER

Introduction The recent Quebec Superior Court decision of Paquette v. Bélanger, 2026 QCCS 430 provides an interesting illustration of the applicable legal principles. Purchaser claims $107,802 from Seller pursuant to the acquisition of a residential duplex in March 2015. Purchaser claims that the property does not comply with municipal regulations regarding both zoning and construction. More particularly, renovations to convert a balcony to an annex were carried out by the Seller without a permit which allegedly precludes Purchaser from obtaining a permit to carry out corrective work since the renovations that the Seller carried out were structurally unsound. Furthermore, the distance between the annex and the property line was less than legally required by the zoning by-law. Prior to purchasing the property, the inspector hired by Purchaser recommended that she obtain from the Seller all documents relating to the renovations carried out by him. for renovations carried out by the Seller's predecessor(s) (Seller purchased the property 2022-10-19), it was recommended that she obtain all relevant permits and documents from the city. It was also recommended that she consult a structural expert to verify the annex that appeared to have shifted. Purchaser obtained a copy of the certificate of location dated 2012-10-02 which affirmed that the constructions on the property complied with both construction and zoning regulations. However, it obviously did not apply to renovations carried out by the Seller posterior to his acquisition of the property. Applicable Legal Principles Article 1725 of the Quebec Civil Code provides that the seller legally warrants the conformity of the property with the law. However, the warranty would not apply in the event that a prudent and diligent purchaser could have discovered the non-conformity from the nature, situation or use of the property. The analysis is a two-step process: first, determine if the non-compliance with the applicable regulation has a significant negative impact on the property; second, determine whether the presence of material indicators exist that would lead a person acting reasonably to suspect the existence of the negative regulatory impact. The Court found that contrary to what the Purchaser alleged, the evidence did not establish that the city refused to issue a permit for the corrective work nor that it required the demolition of renovations that were done without a permit. The evidence in fact established that the Purchaser did not transmit within the prescribed delays, which in fact were extended by the city, documentation required review the request for a permit to carry out the corrective work. The Court concluded that with regard to the first phase of the analysis, the property was in fact not compliant with municipal zoning law because the annexe was built without a permit and too close to the boundary and as a result, a derogation would be required to regularize the situation. With respect to the second phase of the analysis, the Court noted that the Purchaser was made aware of the structural issue by her inspector and was advised to verify with the city whether a permit had been issued for the renovations carried out by the Seller i.e. that the property was in compliance. The Court decided that a person moderately informed acting reasonably would have obtained the satisfactory assurances which she neglected to do. Moreover, the Court found that the Purchaser knowingly chose to accept the risk and proceed with the purchase of the property in the state that it was in instead of taking reasonable steps to shed light on the problems the responsibility for which she now attributes to the Seller. Purchaser also alleged the existence of a structural defect. However, although her inspector recommended that she retain a structural expert to verify the issue, she neglected to do so. The Court, referring to case law, found that the simple possibility that a purchaser had an opportunity to discover the presence of a defect but does nothing could constitute negligence and confirm that the defect is apparent and therefore not the responsibility of the seller. Conclusion Purchaser would be well advised to use reasonable efforts to identify risks regarding the property and if necessary, negotiate responsibility for dealing with the consequences of such risks with the seller before purchasing the property.