Real Estate Talk:
How to acquire warranty

Obtaining warranty when the property is sold without one

By Joseph Marovitch

March 19, 2026

A property is rarely sold without warranty since this causes concern for buyers. A property is normally sold with warranty. This means the seller is warranting the property against hidden defects that cannot be detected in a normal house inspection.

Qualified home inspectors report only what they can see or detect with a thermal imaging device. Home inspectors do not open the walls or tear up the floors. Therefore, what cannot be seen, such as cracks in the foundation, interior walls, fireplace, plumbing, or electrical issues, are covered by the warranty, which means the previous owner would be liable and must repair or pay for the damage.

In some cases, it is better to sell without warranty so the buyer cannot hold the present seller accountable for hidden defects.

A property is normally sold with warranty. This means the seller is warranting the property against hidden defects that cannot be detected in a normal house inspection.

Selling without warranty is good for the following reasons:

1. The house was inherited, and the beneficiary knows nothing about the condition.
2. The seller is advanced in years, entering a retirement home, and does not need the headache.
3. The seller is moving far away, such as overseas, and does not want to deal with the issue.
4. The buyer is a contractor who intends to fully renovate the property.
5. The property was not personally used but was rented, in which case, there may be issues the owner is unaware of. As a note, all multi-residential income properties owned by corporation are sold without warranty. Individual owners of small-income properties are not always aware of the risks and may not sell without a warranty.
6. Other reasons

For a home to be sold without warranty, a clause must be placed in the listing, the brokerage documents, the promise to purchase, and the deed of sale. The clause must state the following: “This property is sold without legal warranty as to quality and at the buyer’s risk and peril.”

By selling without warranty, the seller breaks the chain of prior owners who sold with warranty unless a different clause is placed in the promise to purchase.

How to acquire warranty when the property is sold without warranty

In a recent amendment by the OACIQ (Organisme d’autoréglementation du courtage immobilier du Québec), the government body regulating the actions of real estate brokers, a new rule is now in effect that allows the buyer to exclude the current seller from warranting the property, but not any previous owners.

In a normal sale where the property is sold with warranty, the seller and all the previous owners who are alive also warrant the property against hidden defects. The buyer can hold the prior owner responsible for hidden defects if the current seller cannot be found after the sale.

‘In a recent amendment by the OACIQ …  a new rule is in effect that permits the buyer to exclude the current seller from warranting the property but not any previous owners.’

However, if the following clause is placed in the promise to purchase, the current seller can sell without warranty, but the prior owner(s), who sold with warranty, can be held liable:

“This sale is made without legal warranty of quality, at the risk and peril of the buyer as to the actual owner, but the sale is with legal warranty as to the previous owners.”

In French: « La présente vente est faite sans garantie légale de qualité, aux risques et périls de l’acheteur quant au propriétaire actuel, mais la vente est avec garantie légale quant au propriétaires précédents. »

The information in these articles is summary. Should you have questions, comments or wish to discuss further, please refer to the comments section at the bottom of the page or contact me directly. As well, to view past articles, click here.

Next article: The inspection

State of the market

According to the Canadian Real Estate Association (CREA), home sales were moving slowly in February but are now moving a little faster. CREA economist Shaun Cathcart expects pent-up demand from first-time home buyers to increase. In a recent forecast from CREA, home sales are expected to increase by 5.1% in 2026, and according to Shawn Zigelstein, a broker at Royal Lepage Signature Realty, it would be ill-advised for buyers to wait any longer for lower interest rates before purchasing a property.

Mr. Zigelstein is not wrong that there is a strong possibility rates could rise over the next few months to combat inflation. This is possible because of factors that economists providing opinions on future market movements are not mentioning.

World economies are at the behest of current ongoing global factors. There is a war started by the U.S. with Iran. While the U.S. is fighting with tanks and guns, Iran is fighting by disrupting world economies through the blocking of oil to other countries. Oil is one of the major factors that keep economies moving forward. Aside from blocking oil transportation and causing gas prices to rise to unaffordable levels for most families, oil is essential to the transportation of all goods and services. Therefore, all goods and services become more expensive. This causes worldwide inflation and rising interest rates to combat inflation. The result is rising carrying costs for homeowners and lower household incomes, which cause hesitancy among potential buyers.

‘Most people, busy with their daily lives, tend not to be aware of all these factors and should be informed. There are precautions buyers and sellers can use to mitigate financial risk in the real estate market.’

Should the situation be resolved soon, economies will recover slowly, and markets will stabilize. Should the war in the Middle East be drawn out, the situation will worsen.

The opportunity is that the longer the war continues, the greater the pent-up demand will be. When the oil embargo is resolved and given time, household income will increase, and property values will have risen substantially. There are conditions and risks involved in this scenario. The conditions are that homeowners must be able to manage increased carrying costs while the conflict is resolved and the economy recovers. The other risk is that the war escalates instead of slowing down and continues for an extended period, draws in other countries that are also experiencing difficult economic conditions, and results in a much larger war.

Most people, busy with their daily lives, tend not to be aware of all these factors and should be informed. There are precautions buyers and sellers can use to mitigate financial risk in the real estate market. The best way is to pay attention to verified news, not TikTok, Facebook, or any other sources that offer opinions without facts or proper verification. Better to know than one day be surprised by seismic events.

Until next week…

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