A recent Ontario court case has brought up a very real question faced by real estate agents, investors, buyers and sellers all the time; yet isn’t talked about all that much. The home inspector’s report. Something that’s essential to obtain by anyone even considering purchasing a property. Sellers can sometimes dread them, as they can point to faults within the property; and buyers often must have them before proceeding with their purchase. Home inspectors make a living off them, and a good one in hot markets such as Toronto. The question is – who’s responsible for them when something goes wrong with them?

The topic recently had light shed on it after a real estate agent in Ontario was found guilty of failing to review a home inspection report with his client who was buying the property. If he had, the court maintained, the problems the buyer encountered after the purchase could have been avoided.

It was 2006. A Toronto buyer, Glenda Halliwell, was looking to purchase a home on Dufferin Street, but due to allergies had specific requirements that the house not contain a trace of mould anywhere within it. The real estate agent, Joel Lazarus, submitted an offer on the property to the owners, expressly contingent on the fact that the sale would only go through once the home inspection showed there were no problems with the home. Specifically no mould problems.

Lazarus also recommended the home inspector, Brian Edwards, to conduct the inspection. Edwards did so and found that there were no problems with the home, with the exception of the furnace, which he recommended be replaced. A new furnace was installed before the sale on the home closed, and the purchase went through.

Two months after the transaction closed, Halliwell found extensive mould, moisture, mildew, rot, rust, and drywall deterioration through the home. Halliwell was so upset that she sued all parties involved – the real estate agent, the home inspector, and the sellers. All parties agreed that Halliwell would receive $90,000 in damages, but did not agree on which parties would pay how much.

The matter went to court, and a judge found that the home inspector was mostly responsible – in fact, 50 per cent. The real estate agent, so said the court, was also partially responsible (25 per cent) for not completely reviewing the home inspector’s report fully with his client. However, the purchaser, Halliwell herself, was also found to be 25 per cent responsible for not performing due diligence and fully reading the home inspection report.

Everyone took their case to the appeal court, hoping to overturn the original judge’s decision. And all decisions were overturned.

The home inspector was found 100 per cent liable for the problem, and the real estate agent and Halliwell had both of their cases dismissed.

What do you think of any of the court rulings in this case? Who is responsible for the home inspection report? The inspector alone? Or all parties involved?