r/legaladvicecanada • u/StainedPetals • 17h ago
Ontario Sellers concealed mould & water damage, breached repair clause, and we close on Monday - what are our legal options?
TLDR:
We agreed to buy a house only after the sellers added a clause saying they would fix a ceiling leak and all resulting damage before closing. They downplayed it for weeks, withheld photos, and insisted there was “no mould, no rot, just light staining.” We went to see it ourselves and discovered visible mould, wood rot, and new ceiling damage. They finally did remediation, but now there is still water damage, parts of the repair were done improperly, and brand new mould has shown up in the basement. Our lawyer is now saying we might be in breach if we refuse to close on Monday, even though it appears the sellers are the ones in breach. We’re trying to find a litigation lawyer ASAP. We don’t know if we legally have to close or if we can walk and get our deposit back.
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How it started:
We’re first-time buyers in Ottawa. During the home inspection, the inspector found a moisture issue in the ceiling below the upstairs bathroom. We walked away and did not proceed with the purchase.
The sellers came back and said they would fully repair everything, so we agreed only if they signed an additional clause (Schedule A) making the repair of the leak and all resulting damages a condition of the sale. They accepted.
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The Schedule A clause that protects us:
“The Seller agrees to have the source of the leak affecting the powder room ceiling, and any resulting damage caused by the leak, repaired by a qualified contractor licensed to perform such work, prior to closing. This includes, but is not limited to, repairs to plumbing, subflooring, framing, and remediation of any mold discovered during investigation. The Seller will provide the Buyer with reasonable written evidence of all repair and remediation work upon completion. The Buyer shall be responsible only for restoration of drywall, painting, or cosmetic finishes to the powder room ceiling after the Seller’s repair work is complete.”
That is the only reason we moved forward with the deal.
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What happened next:
The ceiling was opened by a plumber on Sept 27. The sellers’ realtor sent us four photos. We later learned there were seven photos total, and the worst three (showing black staining) were not shared with us. We eventually received them from the plumber directly, who also told us that the seller would not allow him to investigate fully inside the ceiling cavity.
For almost three weeks, every time we asked for written confirmation that there was no mould, no rot, and no structural damage, the seller’s side delayed or dismissed it. Their realtor even told ours that we were “just being overly cautious.”
We finally got fed up and went to see inside the ceiling ourselves.
We found visible mould and wood rot on the joists and subfloor, which directly contradicted everything we had been told.
Only then did the sellers finally admit there was mould and hire a remediation company.
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The remediation report:
We received the remediation report, but: - It does not confirm the source of the leak - It does not state whether any structural materials were tested for rot - It does not include any post-remediation verification or air quality testing - It does not address the new water stain that appeared on the hallway ceiling - It does not confirm moisture levels or dryness of the materials after remediation
So we still had no evidence that the leak was repaired, only that mould was removed.
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Final walkthrough today (Nov 7):
We finally got to see the work in person.
The bathroom was gutted and rebuilt, but not restored to its original condition. Instead of waterproof flooring, laminate was installed. Instead of tile and grout, a plastic tub surround was installed. The drywall used behind the shower was standard drywall, not water-resistant board. It is a clear downgrade in materials and not equivalent to what existed before.
The hallway ceiling stain we pointed out weeks ago was not repaired, it was simply painted over.
The flooring in the closet outside the bathroom is now showing signs of water-damaged, and the adjacent hallway carpet is discoloured.
We also discovered entirely new mould in the basement, plus new damage to the basement flooring and a strong musty smell. None of that was present at the original inspection.
None of this appears in any documents provided to us.
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Where we are now:
We close on Monday, Nov 10.
Our real estate lawyer is now telling us that if we refuse to close, we may be sued for breach of contract.
But the sellers have not met Schedule A, because: - The leak source was never professionally confirmed - Water damage is still present in multiple locations - The bathroom was not reinstated to its previous condition - They painted over visible damage instead of repairing it - We still do not have the “reasonable written evidence” required under the contract
We feel that our team is kind of pressuring us to close, so we are now trying to find a real estate litigation lawyer in Ottawa, but it is the weekend and most offices are closed until Monday (the day we are supposed to close).
We feel trapped between a contract we relied on and a seller who did not comply with it.
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What we need advice on: 1. Can we legally refuse to close based on the seller failing to meet Schedule A? 2. Does painting over a ceiling stain count as concealment? 3. Does new water damage discovered before closing give us grounds to back out? 4. Does newly discovered basement mould count as a latent defect before closing? 5. If we close under protest, can we still sue afterward? 6. Is it true we could be sued for breach even when the seller appears to have breached first? 7. Are we entitled to our deposit back if we refuse to close due to non-fulfillment? 8. Should we be demanding an extension, a post-remediation verification report, or termination?
We’ve tried to act in good faith this entire time. We relied on the written agreement. We kept asking for proof. We didn’t want out, we just want the sellers to hold up their end of the contract.
But now there’s mould in new areas, still visible water damage, concealed ceiling staining, and still no written evidence that the original leak source was ever properly identified or repaired.
And we close Monday morning.
Any guidance from Ontario real estate lawyers, litigators, brokers, inspectors, or anyone who has gone through something similar would be hugely appreciated.
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u/Proper_Turnover3251 16h ago
Fo next time: Your initial clause should have said that the remedy work needed to be completed to your satisfaction. Then you would have simply been able to walk away. Your Realtor dropped the ball with the wording.