Legal Definitions - latent equity

Definition: Latent equity refers to an equitable claim or right that is known only by the parties involved or has been concealed from someone who has an interest in the matter. It is also known as secret equity.

Example: A couple buys a house and discovers that there is a hidden defect that was not disclosed by the seller. They have a latent equity claim against the seller for the cost of repairs. The claim is latent because it is not known to anyone else except the couple and the seller.

This example illustrates how latent equity is a hidden or secret claim that is not apparent to others. It is only known to the parties involved and can be used to seek compensation or remedy for a wrong that has been done.