Hidden Defects in Your Home: What They Are and How to Claim

When buying a home, we are making one of the most significant financial decisions of our lives. However, this process can always involve certain risks, especially when it comes to uncovering hidden defects – that is, serious flaws in the property that are not visible at the time of purchase, and which can even lead to unexpected expenses or render the property unusable.

According to some real estate industry studies, approximately 20% of property sales encounter conflicts due to hidden defects that were not disclosed at the time of purchase. Therefore, it is crucial to understand what hidden defects in homes are, how they can be detected before or after purchase, and what legal actions can be taken to protect your real estate investment.

In this article, you will find an in-depth analysis of what constitutes a hidden defect in a home and how to differentiate it from an apparent defect, what the most common types of hidden defects in homes are, how we can detect them before buying, what legal rights the buyer has and what deadlines they have to claim, as well as several practical tips that can help you avoid potential problems.

What are hidden defects in a home?

Hidden defects in a home are serious flaws or problems in a property that are not evident during a superficial inspection or at the time of purchase, which affect the habitability, safety, or value of the property, and which existed before the purchase but were concealed or not disclosed by the seller.

Some common examples of hidden defects in homes can include structural dampness, foundation cracks, faulty electrical or plumbing systems, or outstanding debts associated with the property you intend to buy.

Difference between apparent defects and hidden defects

Not all defects found in a home are claimable, so it is crucial to know how to differentiate between apparent defects and hidden defects.

Apparent defects are visible flaws that can be noticed during a normal superficial inspection, for example, peeling paint. The buyer, being aware of these defects, accepts them when acquiring the property "as is" and, therefore, they do not generate any legal responsibility for the seller.

On the other hand, hidden defects are flaws that require an expert technical review to be detected, such as broken pipes inside a wall. In the case of hidden defects, the seller is obliged to compensate if they did not disclose them, and these can even be grounds for annulling the sale or demanding financial compensation or a repair commensurate with the problem.

For example, if you see a leak in the ceiling during a visit, this is an apparent defect, as it is evident and you bought the home knowing of its existence, and you will not be able to claim for this problem later. However, if after moving into a home you discover a hidden pipe leak causing dampness throughout a wall, this is a hidden defect that could not have been detected before the purchase, and you will indeed have the right to file a claim.

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Why it's a common problem in property sales

Some factors that can lead to hidden defects include a lack of strict regulation, as many sellers do not disclose problems to avoid lowering the property's price. It can also result from insufficient inspections, where buyers cut costs by skipping technical appraisals, or from market pressure, as in high-demand areas, speed tends to be prioritized over detailed review. It is estimated that approximately 30% of real estate legal claims are related to undisclosed hidden defects.

Most common types of hidden defects

Structural defects

This class of hidden defects can include, for example, cracks in load-bearing walls or foundations, dampness due to filtration in basements or walls, and problems with roofs or even balconies with a serious risk of collapse.

Installation failures

Dangerous electrical wiring, faulty water or gas pipes, or defective heating systems are common hidden defects. Furthermore, these hidden defects can be very serious and endanger the people living in the home.

Legal Issues

These types of issues can include outstanding debts such as property tax (IBI), homeowners' association fees, or uncancelled mortgages, undeclared or unpermitted construction, or incorrect property boundaries that could constitute land encroachment.

Contamination or Infestations

The most common hidden defects in these categories are the presence of toxic mold, such as black mold, or pests like termites or woodworm, which are not visible to the naked eye.

How to Detect Them

Before buying, it's a good idea to hire a technical expert, such as an architect or engineer, who can identify structural problems. You should also review documentation like the energy performance certificate, building permits, the latest gas and electricity inspection reports, and a property registry extract to check for debts. Additionally, it's ideal to visit the property under different weather conditions.

After purchase, some common symptoms that may indicate hidden defects include persistent damp smells, abnormally high utility bills (which can be caused by leaks), or doors or windows that don't close properly, which could indicate the onset of structural settlement.

Hidden Defects in Resale Homes vs. New Builds

In resale homes, we may find the highest risk of age-related defects, for which the seller is liable for hidden defects. There is a claim period of 6 months from the discovery of these defects.

For new builds, hidden defects are covered by a ten-year structural warranty, and the developer is responsible for construction defects, with a 1 to 3-year warranty for finishes.

What Does the Law Say?

The Civil Code (Art. 1484) states that the seller must compensate if they failed to disclose hidden defects.

Legal Deadlines for Each Case

The claim period is 6 months from the discovery of the defect (not from the purchase date).

Guarantees the Seller or Developer Must Offer

Mandatory guarantees include a 10-year period for structural damage (in new builds) and 3 years for installations such as plumbing or electricity.

How to Claim Hidden Defects: Step-by-Step  

Document the Problem

For this, you need photos, technical reports, or witnesses who can attest to the problem's existence.

Notify the seller

This must be done in writing, either by burofax or certified mail.

Negotiate a solution

An agreement can be reached for the seller to cover the cost of a repair or contribute to compensation.

Sue

If an agreement cannot be reached, legal action or arbitration can be pursued.

What type of compensation can be claimed for latent defects?

You can request compensation for damages, covering the cost of necessary repairs, a price reduction if you prefer to keep the property as is, or a contract termination, which would involve a full refund.

What happens if the seller knew about the defect?

If the seller knew about the defect and intentionally concealed it, they can be accused of fraud (intentional deception), which allows for claims of moral damages or criminal charges in serious cases.

Can a purchase be canceled due to a latent defect?

Yes, this can be a justifiable cause, but only if the defect is serious (affecting the safety or habitability of the property) and it can be proven that the defect existed before the purchase.

Tips to Avoid Problems with Latent Defects

Technical inspection

Never skip it, even if it means a higher cost in money or time.

Contract

Demand that the contract include a "latent defects warranty" clause.

Property history

Review the history to be aware of any renovations, maintenance it has undergone, the problems that led to them, and their outcomes.

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Conclusion 

Hidden defects can turn buying a home into a real nightmare. However, with proper prevention, professional advice, and a good understanding of your rights, it's possible to minimize risks and protect your investment.

If you suspect your property has undeclared defects, you must act quickly, as you only have a crucial 6-month period to file a claim. In more complex cases, a lawyer specializing in real estate law can be your best ally.

But don't let these risks deter your investment plans; now that you're well-informed, you'll be able to avoid these kinds of problems and make excellent real estate investment decisions.