Buying an Ontario Home in a Floodwater Zone

That pastoral ravine winding past your new backyard is a joy to behold. But a potential disaster in a heavy rain. Who knew when you bought your home that it could be under water soon.

New Home Buyer Surprises

The seller for one. Odds are the previous homeowner was well aware of the floodplain where your home is located. Their home insurance rates likely reflected the sorry state of their waterlogged address. Just living in a flood zone can make it impossible to get homeowner’s insurance. 

Mortgages for Homes in Flood Zones

Without property insurance, you may not get a mortgage or be refused a mortgage renewal when the flood zone comes to light. Unless you have cash, your new home purchase could go out the window with your shattered dreams.

Flooding and Ottawa Home Buyers

When it rains, it pours in Ottawa. The Ottawa River topped its banks against last year. So much for the “once-in-a-hundred-years” washout media called it in 2017. (Actually, the capital city has seen seven major floods since 1909.) As Ottawa home buyers have discovered, mortgage lenders can’t protect their investment unless you can get full replacement value after a damaging storm. When flooding is a regular event, overland flood insurance may be a pipe dream.

A River Runs Through Your New Home

Oh those heart sinking moments when flood water comes through your windows, doors or ceiling! If it happens too often, your homeowner’s insurance may be cancelled, reduced or go through the roof (if you don’t) when you renew. Living in a flood zone is neither sudden nor incidental, the two events householder insurance generally protects you for.

What to Do if You are in a Floodplain 

In the heat of the moment, when sales offers are flying fast and furious, it’s easy to overlook essential details. Revisiting the agreement of purchase and sale after the pressure’s off can be helpful. The seller may have listed past flood damage. In which case, make your next visit to an Axess Law real estate lawyer.

Disclosure and the Law in Ontario

Two points to know: 

  1. Sellers don’t have to disclose their home was flooded if there isn’t any hidden damage. 
  2. You may not have a legal case. 

For example, a heavy rainstorm, burst water main or sewer back up occurs, but the seller fixes the damage or pays to have it cleaned up. You see a water stain on the wall, but accept their explanation. That’s called a patent defect. You have no legal recourse if you saw it and bought the home anyway.

Sellers’ Obligations for Hidden Flood Damage

Hidden water damage is more serious. Latent defects, as they’re called, need to be disclosed, typically on the sellers property information sheet (property disclosure statement if you’re from outside Ontario). The SPIS is prepared when a seller lists their home. Your realtor can get you a copy. Be aware the SPIS is just that, only information. It’s not a warranty, but you can use it to decide whether to walk away. An Ontario court judge will ask if you reviewed it.

When Home Sellers Are Liable for Hidden Damage

Canadian courts have found home sellers liable when hidden damage is revealed after a real estate transaction closed and they:

  • lied about damage, 
  • or concealed a defect on purpose.

Lead-based paint, a recent death or untreated termites can tip the balance sheet. Flooding that caused structural damage is definitely worth hiring a lawyer. (While you’re at it, check out the area. Toronto realtors The BREL Team staked out some odd activity next door and discovered an illegal rooming house with a violent past. The potential buyer walked.) 

What Happens When Damage is Concealed

Home sellers caught red-handed can be responsible for paying damages. Only a home inspection can truly protect you though. The culprit may be off the hook if home defects are more serious than listed on the SPIS, but you can’t prove the seller knew it. 

Bottom Line for Avoiding Home Buying Mistakes

Make your offer conditional on an inspection and go in low in case you need money for repairs or want to unload your purchase quickly. Especially if:

  • a river, lake or creek runs by it
  • you are buying your first home
  • it’s a private sale
  • the home is rented
  • the owner is very old or incapable
  • it’s a bank foreclosure
  • an estate trustee is selling in “as-is condition”.

Lowballing a Home Sale

When a deal is too good to be true, it probably is. You could be in over your head, drowning in deep waters.

Flat Fee Legal Services for Ontario Home Buyers

Axess Law Ontario real estate lawyers can advise you on the agreement of purchase and sale for a home in a floodwater zone. Video calls and e-signing appointments can be arranged anywhere in Ontario, 7 days a week, day or evening. Licensed real estate lawyers are available to meet in person at our Toronto, Scarborough, Vaughan, Etobicoke, Ottawa, Mississauga Winston Churchill or Mississauga Heartland law offices. Make an appointment by dialing toll free to 1-877-552-9377 or 647-479-0118 in Toronto or use our online booking form. 
Click here to learn more about Axess Law’s real estate law services.

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