I attended a few RECO courses this week as Toronto Realtors are required under law to keep themselves up to date with regulations and other day-to-day business affairs. From the five courses I attended the most interesting one was conducted by Toronto real estate solicitor Mark Weisleder, it's fair to say that he had my ear for the entire four hours. He spoke about a matter that went before the Ontario Superior Courts that involved a home buyer, home inspector and of course a Toronto real estate agent. I was shocked to hear how the proceedings ended with a partial judgment against the plaintiff, inspector and Realtor; the plaintiff of all in this matter was slapped with 25% liability in her own argument.

The home buyer which we will leave nameless sought the help from a local Realtor to buy a home in the downtown core, now downtown Toronto homes we should keep in mind are generally much older homes and in need of usual up keep more so then a newer home you would find in suburbia per say. The buyer finds the perfect home just south of Bloor St on the west side of the city and instructs her agent to present an offer to the home seller. The offer was accepted with a home inspection condition that if the buyer was not satisfied with the said inspection the agreement would be terminated and any or all deposits would be returned to the buyer in full without deduction. The buyer proceeded with the home inspection and did her own due diligence in which home inspector would be hired to take on the task, on the day of the inspection, the home buyer walked through the house during the inspection, home inspections typically average 2-4 hours depending on size, how many baths and kitchens are involved.

During the walk through the inspector pointed out minor deficiencies as this is common, among the issues it was noted that the furnace was on its last legs and needed to be updated sooner rather than later. The inspector also spoke about how it how some front exterior concrete parging on some foundation cracks would help from keeping any water from entering the basement. The original owner told his Realtor that he lived there for many years and never had any major issues. The basement did not have a mildew like smell during the home inspection as if it did the buyer would not have gone ahead with the purchase because she is very allergic to mold and mold like smells.

Once the home inspection concluded she was asked to sign off on the home inspectors waiver stating that in the event the home inspector was negligent than the home inspector can only be liable in the amount of the cost of the home inspection which could be in the range of $500.00 or so. (This is a standard form that all buyers are required to sign from any home inspection company....It’s used to protect the home inspector) the buyers Realtor decided that it would be prudent to re-negotiate a new furnace with the seller due to the focus that the buyer and home inspector emphasized. The buyers Realtor was successful in achieving a new furnace at the expense of the seller, the buyer was happy and decided to waive the condition. 

A few months after closing the new home owner had a major flood in the basement at her own doing which came to be known after the fact, a few more months go by and she notices mold growing on the basement walls, a mold free home was the most important buying criteria that she had, as you can start to see this was going to be a huge issue. The home had become unlivable due to her allergies. The home owner become incensed that her new home was uninhabitable and she began to search for remedies. Her first step was to complain to RECO about her Realtor that he did not protect her interests at the advice from her litigator. She later launched a lawsuit against her Realtor, home inspector and the previous home owner for not disclosing any pert ant facts. It was her belief that the home had mold before she bought the house and that the problem was being caused by water seeping in from the exterior cracks of the foundation walls over an extended period of time.

During the court proceedings the Judge asked the home owner if she understood what the limited liability form that she signed that the home inspector presented to her? Her reply was "there was a huge book of materials and information; it was over whelming to understand it all in such a short period of time"

The Judge then asked the buyers Realtor why he would negotiate a new furnace and not the exterior structural damage that needed repair to prevent water from entering the home? The Realtor responded by saying "I'm not a general contractor and that is not my expertise, how could I know if that was or will be a problem"

The Judge then asked the Realtor why you didn’t have the home inspected for mold. The Realtor responded by saying "there was no evidence and the home owner did not want to undertake another expense by requesting a specialist to come in and check for evidence of mold"

To make a long story short the Judge throughout the home inspectors argument that he had a signed limited liability waiver from the home buyer and found him 50% liable for damages, he then throughout the Realtors argument that he is not a contractor specialist and that he should of protected his clients interests better and found him liable for 25% of the damages.

Then the Judge put his attention to the home owner and found her liable for 25% of the damage because she should have persistent in hiring a mold specialist due to her allergies.

The matter is being appealed because as I mentioned earlier the home owner later admitted to having a flood through the insurance investigation.

In your opinion, was this the right decision? And do you think that the decision will be over turned through an appeal?

Please comment below as I welcome your opinion.

Authored by Vincent La Fiura