If your client’s property virtually next-door to a nudist beach, must this be disclosed to potential buyers when he or she tries to sell?
It’s the type of gray-area question that can arise for a lawyer representing a seller in a real estate transaction. No matter how routine the deal, there always comes the moment to decide exactly what information about the home -- good or bad -- must be given to the putative buyer.
The old adage of caveat emptor notwithstanding, sellers have a legal duty to disclose any latent defects that make the property inherently dangerous, or unfit for habitation. But the precise “bright-line” test for what amounts to a latent defect is hard to pin down with precision, even for the courts.
In a British Columbia case called Summach v. Allen, the buyers had provided a $100,000 deposit on the purchase of the seller’s beach-front property. Unbeknownst to them, there was a nude beach located virtually next door. This was not evident at the time of the agreement, which the court pointed out had “occurred in the middle of November and even the sunny Okanagan weather cools off sufficiently to dissuade nude cavorting.”
The sellers had not mentioned the nude beach during negotiations; the buyers claimed it was tantamount to a latent defect. They refused close, and demanded the return of their deposit.
In making the assessment of whether the sellers had a disclosure duty, the court dithered somewhat, stating that it “may or may not be a defect” – it depended on the application of a subjective test. In this particular case, and especially since nudity took place outside the property’s borders, no latent defect was present. The trial court explained:
The presence of nude bodies next door or parading in front of one’s house may or may not be a defect. This requires a subjective test. To allow defects to be determined by individual preferences would open the floodgates of litigation by remorseful purchasers and create an impossible standard of disclosure for vendors. In this case, the alleged defect was occurring outside the boundaries of the property purchased.
The presence of a nude beach next door but one to the subject property is not a defect, latent or patent. There is no duty on the vendor to disclose the existence of the nude beach.
The B.C. Court of Appeal confirmed the lower court’s ruling on appeal. (And for the record: both judgments are silent on whether any photographic evidence was tendered, to demonstrate the extent of the “nude cavorting” in contention).
As this case illustrates, for lawyers deciding whether a client should disclose a property characteristic, it can sometimes be a tough call. All the more so where, as far as neighboring nudists go, one person’s “latent defect” could conceivably be another person’s “selling feature”.
 2002 BCSC 119
 2003 BCCA 176 (CanLII).