[He Sold While Knowing of a Defect But Did Not Inform the Buyer]

The answer—and Allah is the granter of success—is that it is not permissible for the seller to sell the commodity while knowing it has a defect, unless he informs the buyer of the defect; then there is no harm. This is because such conduct is a kind of deception, against which warning has come in what is related from the Prophet—May Allah bless him and his family and grant them peace—who said: “Whoever deceives us is not of us.” And because that contradicts what is related from the Prophet—May Allah bless him and his family and grant them peace—namely his saying: “A believer is not (truly) a believer until he loves for his brother what he loves for himself, and dislikes for him what he dislikes for himself,” and due also to what is established regarding the obligation of sincere counsel for Allah, His Messenger—May Allah bless him and his family and grant them peace— and the elite and the common folk of the Muslims. This agrees as well with what is reported in the books of fiqh from the Prophet—May Allah bless him and his family and grant them peace—of prohibiting such a sale as mentioned specifically in the question.
Source: Min Thimār al-ʿIlm wa al-Ḥikmah vol.2