By Martin Rumack

An Ontario case, Rimmer v. Building Insights Inc., may give some comfort to potential buyers – but it probably keeps home inspectors awake at night. It features a home inspector who was ordered to pay almost $19,000 to a buyer who hired him, all because he reported on a significant defect verbally, rather than in writing.

Randy was thinking of buying a home for sale in Cambridge, Ont. He made the seller an offer that was conditional on obtaining a satisfactory home inspection. Randy then hired a home inspector, who was duly registered with the Ontario Association of Home Inspectors, to obtain an inspection report on the various systems and components in the home.



The inspection took about an hour to complete, with Randy accompanying the inspector as he toured the home. During this process, they carried on a conversation about the various concerns that the inspector could observe. These included cracks in the brick masonry and concrete driveway in one area and other seemingly minor problem areas. The inspector provided a written report, which Randy later admitted that he merely “skimmed”.

Apparently relying on that report, the next day Randy waived the home inspection condition in the Agreement of Purchase and Sale and proceeded to buy the house.

After the deal closed and Randy moved in, he noticed for the first time that the kitchen floor was not level. When he put a tennis ball in the centre of the kitchen, it rolled to the south. After consulting with an engineer, he learned that the western foundation wall was sinking, and had been for some time. He lived with it for a while, but later obtained a second report from a structural engineer that confirmed the same results. He was advised that to keep it from sinking further, parts of the home needed either a reinforced foundation or the addition of secondary supports.

Randy sued virtually everyone who was involved in the deal (including the seller, the real estate salespeerson and the home inspector), but he eventually consented to dismiss his lawsuit against all but one of them: the home inspector.

At trial the judge ruled that although the inspector had conducted the inspection in a professional, thorough and conscientious manner, he had still fallen short of meeting the standard of care that was expected of him – that of an ordinary, reasonable and prudent home inspector in the same circumstances. This breach in his duty made him negligent, making him legally liable to Randy for damages.

While the inspector observed during the inspection that the kitchen floor had a noticeable downward slope, and although he mentioned it to Randy verbally, the court found this was simply not enough.

The sloping floor pointed to a foundation defect, and therefore amounted to a “’significant deficiency for the proper functioning of the dwelling, for its safe and comfortable use as a residence, and for its value, the court ruled. This was true notwithstanding a lack of expert testimony to indicate that the sloping would certainly get worse in the future.

The court determined that the problem was sufficiently important to be worthy of bringing to Randy’s attention.

Secondly, the court concluded that while the inspector was aware of its significance and mentioned it verbally, it was unfortunately not communicated to Randy effectively – it was not “’brought home” to him. Especially in light of the specific wording of the home inspection agreement (which obliged the inspector to make a visual inspection only, but to report any “’significant”’ items as well as “seriously deficient systems and components or those nearing the end of their useful life”), it was the inspector’s duty to include the observation in his written report. This was the level of notice that was required under the Standards of Practice imposed on home inspectors by the professional association.

The fact that Randy merely skimmed the report (such as it was) was immaterial since it did not affect the inspector’s own level of duty.

Finally, Randy had clearly relied on the home inspector’s assessment when making the decision on whether to purchase the home. The court was satisfied that had he been meaningfully alerted to the existence and extent of the sloping kitchen floor in advance, Randy would not have waived the home inspection condition in the agreement, at least not without an adjustment to the purchase price to reflect the cost to rectify the problem.

Since the inspector had fallen short on his obligations to Randy, he was liable for the specific damages that Randy incurred as a result of the shoddy inspection – the cost to shore up the foundation and re-level the kitchen floor. The court ordered the inspector to pay Randy $18,645 to cover those costs.

Toronto lawyer Martin Rumack’s practice areas include real estate law, corporate and commercial law, wills, estates, powers of attorney, family law and civil litigation. He is co-author of Legal Responsibilities of Real Estate Agents, 4th Edition, available at the TREB bookstore and at LexisNexis. Visit Martin Rumack’s website.
  • Carolyne L

    Re: fiduciary obligations…

    Defects are defects. Period. And do not just involve the finding and reporting of such by a home inspector.

    Agents need to be mindful that if they have knowledge of a defect, patent (obvious) or latent (hidden), this information needs to be “disclosed” in the actual listing; the listing agent needs to draw to the attention of his seller, making the seller aware that his agent “knows,” whatever he knows, or surmises, has seen with his own eyes, or has been made aware by his seller – sometimes surreptitiously, (by agent’s putting the information confirmation in writing and has advised the seller the need for disclosing), directing his seller to get “fix-it” quotes, repair before going to market, or offer a rebate to his buyer for the dollar amount involved, and advise the seller that this information if known by his agent, or by the seller, “must” be disclosed in some manner, in writing, so as to prevent the seller and all the agents involved (including “team members), both buying and selling sides, from lawsuits, or possible resultant non-closing of transactions, not just even non-removal of conditions, (failing which clauses, conditional clauses – condition precedent, not condition subsequent – self destruct) during which lag time the subject property is theoretically off the market wasting valuable market time, which could prove especially financially disastrous in any sort of turbulent down-turning market. When most “subject to contracts” are in play, often showings/viewings are curtailed until MLS is advised that the property is again up for accepting further offers.

    LISTING AGENT: Advise seller, in writing, to seek advice from a real estate lawyer and/or a litigating lawyer who understands real estate contract law (before submitting the listing to MLS); not all are experts in all areas of law (many real estate lawyers do not do litigation and have to refer their file), immediately, if seller is deciding not to follow his listing agent’s (magic word) “written” advice.

    So important!!! It’s not “only” about protecting the public, it’s about protecting your licence and corporate repercussions that run far afield.

    Years ago I showed another company’s listing by appointment and discovered a “spongy” basement block wall that had been recently painted (could still smell the paint), that was tacky to the touch. I pointed it out to my buyer who actually hadn’t noticed. Further “evidence” was located in the cold cellar. Cans of water proof paint matching the colour. My buyer decided against the property even though the location was perfect and the house otherwise a good match.

    Back in the days of “agent showing” feedback, I let the listing agent know what I had discovered and the cold cellar evidence, who promptly started calling me nasty names and told me to mind my own business and that I had been wrong to address the issue to my would-be buyer and that I could be sued for interfering with his listing likely having prevented a possible sale. He tore my head off. Said things as such were for an inspector to discover, none of “my” business. ! YA THINK???

    This from a top producing agent in the business longer than me.

    Carolyne L 🍁

  • Alan M.

    The, dated, Court Decision referenced was an absolute no-brainer! And while the subject article may be a worthwhile advertorial for Martin Rumack, it serves as an anti-advertorial regarding the question of REALTOR value.

    For a Registrant/ REALTOR to suggest that they don’t have a place or a role while a Property Inspection is being conducted requires a blissful amount of ignorance, however, the suggestion in and of itself isn’t shocking, unfortunately. Should it be the case that the Courts support that a REALTOR doesn’t have an obligation to see that “patent defects” are noted on an Inspection Report (pursuant to Agency and fiduciary obligations) then the buyer clients of REALTOR’s might as well buy privately, or at least, unrepresented by a REALTOR, as it relates to the question of the Inspection. As it is the responsibility of the REALTOR to coordinate ancillary Inspections, a competent REALTOR should make a point to hear everything that is being said to their buyer client.

    The fact that a Home Inspector may neglect to note a patent defect on an Inspection Report, doesn’t relieve a REALTOR of their obligation to: discover facts! A patent defect is an obvious fact and the underlying cause of such a fact is precisely what a REALTOR must discover. Whether the Home Inspector falls short, as a result of not being able to state the cause of an effect, or by not noting the patent defect at all, the REALTOR would still have an obligation of enlisting the aid of the appropriate ancillary inspector, to protect their client.

    CREA would be well advised to spend their advertising money that is earmarked towards promoting REALTOR value, by explaining REALTOR value to REALTOR’s, first. Were it the case that REALTOR’s really understood what is expected them and were able to properly act on it, CREA wouldn’t be resorting to silly national advertising campaigns. Alternatively CREA could just collapse itself, as the industry isn’t showing any real signs of gaining a sense of itself!

  • Brian Martindale

    This decision by the judge rests on one legal tenet, and one tenet only, as noted by Martin within the last sentence of the first paragraph: “…all because he reported on a significant defect verbally, rather than in writing.” All other arguments are irrelevant. Having said this, following is my opinion regarding what a conscientious professional registrant ‘should’ do when dealing with the complications of an inspection and an inspector’s final report.

    First of all, one needs to determine if a registrant is indeed a ‘professional’. An amateur has no business commenting on an inspector’s inspection process, and thus, on the verbal and/or written results of said report. This removes the majority of registrants from the critiquing process because they are the members of the ever-ending parade of here-today-gone-tomorrow ill-prepared, un experienced, recent, or fairly recent, test passers (amateurs). To these rehearsing-for-the-big time amateurs I say: keep your mouths closed on this issue with the exception of recommending that your buyer client(s) engage home inspectors of ‘their’ choosing based upon ‘their’ own research vis a vis contracting the best inspectors. That means buyers using their own due diligence by asking their lawyers’ opinions regarding who the lawyers would use to inspect their own potential property purchases. If the recommended/chosen inspectors eff-up, then the inspectors ‘and’ the lawyers can be held to account from both a legal and moral perspective. Many lawyers do have a conscience. Now, this leaves us with what a ‘professional’ registrant ‘should’ do regarding this always potential quagmire.

    A ‘professional’ registrant will always know his/her limitations; no one knows everything. The wiser one is, the more one knows how much one does not know. However, there are some registrants (not many) who know much more about the intricacies of residential construction/problems than most. Why? Simple; they have been previously involved in the construction process as tradespeople, builders, municipal building inspectors etc. From this group comes the ability to at least comment on a home inspector’s inspection process and the final ‘written’ report, (the legal document) which is the only thing that counts. A ‘professional’ registrant’s opinions regarding an inspector’s report should also be in writing, signed by same and dated. A ‘professional’ registrant (in all other aspects), possessing the hands-on construction knowledge so noted above, should always accompany his/her client(s) throughout the inspection process, all the while keeping his/her ‘professional’ mouth closed as the inspection progresses. However, the registrant should take notes throughout the inspection process. Why? Inspectors sometimes miss defects (both patent and latent) that the ‘professional’ registrant may not miss. I have been a party to this reality numerous times whilst accompanying my clients on an inspection. One inspector even missed a bowed-in basement block wall until I mentioned it and physically showed it to him (out of earshot of my buyer client). It was obviously not in his repertoire of potential defects, as that kind of defect is quite rare. One had to actually stand back and eye-up the wall to see the bow. Had I not been on-site for the inspection, and even if so, had not noticed and mentioned this defect to the inspector, it would not have appeared within the written report. My client did not purchase the subject property based upon the final written report finding(s).

    To conclude: a ‘professional’ registrant should always accompany a client on an inspection, and should make the client aware of anything that he/she would be concerned about himself/herself. That is the conscionable, thus fiduciary-requisite thing to do. One should never ignore what might arise as a problem for one/s client in order to facilitate a deal closure and thus gain a commission. A commission ill-gained in this manner cannot be viewed as being earned. Too often, thanks to the ranks of too many amateurs within this what-should-be an industry-wide profession, a registered ‘salesperson’ (who desperately needs that next commission cheque) might do the selfish, anti-fiduciary thing, and cross one’s fingers to boot.

  • Dawna

    I believe both sellers and buyers agents should be present at home inspections, but truth is, they very often are not!!

  • Matthew Steger

    Not to say the inspector is not liable for missing something like this, or not including it in his written report, but I always tell my clients to fully read their report and, if something is clear or if something appears to be missing, to please contact me immediately in case I made an error.

    • l Holdway

      which won’t protect you

  • Lynne

    Paul, the agent was not there because the clients have a right to a 100% unbiased property inspection. If the agent is there, it is no longer unbiased. Small comments change everything, agents are not inspectors, thus we have no business being there. Our job is to discuss how they feel about the inspection after it is completed, are they satisfied with the results? Do they feel the need to consult anymore experts before proceeding? Are there any concerns they want to discuss in greater detail with property inspector? That is our job, not to nanny them during the property inspection. We have no place offering suggestions on how big or how small an issue may be. So if the client just “skimmed” and waived all conditions after you have done your due diligence and asked all the right questions, the agent is not a fault.

  • Paul

    So where was his agent while the inspection was being conducted? How they got off the hook is beyond me.

  • David White

    this is from 2013 – hardly news