Home inspector fined $193,000 for missing key structural problems

Monday, November 16th, 2009

Jane Seyd

A home inspector who failed to find major structural problems with a $1-million house in North Vancouver has been ordered by a judge to pay $193,000 to a couple who relied on his report before deciding to buy their Montroyal-area home.

Manuel Salgado and Nora Calcaneo hired Imre Toth, an architect and home inspector, before completing the purchase of the house at 4884 Skyline Dr. in September 2006.

Before they went through with the deal, they asked Toth to look at the house and tell them if there were any red flags that should cause them to back out of the purchase.

Toth inspected the home and identified some structural problems. But according to testimony in B.C. Supreme Court, the inspector missed many other problems and estimated the cost of fixing the deficiencies at about $20,000 — far below the actual cost.

After they bought the house, the couple hired an engineer, who found many more problems than those pointed out by the home inspector. The real figure for fixing those serious structural problems was tagged at about $213,000.

In an unusual judgment against the home inspector, Justice Grant Burnyeat described Toth’s report and estimates for repair as “woefully inadequate.”

In particular, the judge found Toth failed to find that many key support beams for the house were rotten, because he hadn’t looked at them. Toth was negligent when he didn’t tell the couple they should have hired a structural engineer to examine the beams, wrote the judge.

His ballpark estimate of a $4,000 repair job “lulled the plaintiffs into assuming the rot was of no particular importance and that it could be inexpensively corrected,” wrote Burnyeat in the judgment.

“I find that the use of the word ‘fix up’ [in the report] lulled the plaintiffs into assuming that minor or cosmetic changes could be made,” he said.

In testimony during the trial, Toth suggested it was possible the rot had set in between the time he did the home inspection in September 2006 and when the engineer took photos three months later. But the judge rejected that.

He added Toth also misled the couple when he didn’t clearly point out other serious problems with stabilization of the house. Toth should have told the couple to hire a geotechnical engineer, the judge said. His estimate of a $16,000 repair bill for required work also fell far short of the $75,000 cost now estimated to do the job.

In court, the home inspector pointed out that Salgado signed a contract limiting Toth’s liability to the cost of the home inspection — $450.

But the judge said it was clear the couple were relying on his advice when deciding whether to buy the home.

“An inspector invites reliance by the very nature of the advice that is given,” wrote the judge. “Plainly, if prospective home purchasers did not believe that they could secure meaningful and reliable advice about the home they were considering purchasing, there would be no reason for them to retain an inspector to inspect that home.”

After they bought the property and the problems became apparent, the couple appealed their assessment to the 2008 assessment review panel. While the land value rose from $756,000 to $887,000 between 2007 and 2008, the value of the house itself was written down from $260,000 to $10,000.

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