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.