Court ruling rattles home inspectors
Bob Aaron
Bob Aaron

Posted On: Saturday, November 21, 2009
The home inspection industry in Canada may never be the same again following the decision of the British Columbia Supreme Court last week in the case of Salgado v. Toth*.

Back in September 2006, Manuel Salgado and Nora Calcaneo signed an agreement to buy a house in North Vancouver for $1,095,000. The contract was conditional on financing and a home inspection.

At the recommendation of their real estate agent, the buyers hired Imre Toth and his company HomePro Inspections to prepare a home inspection report for the property. Toth inspected the interior of the house, then spent another 30 minutes examining the roof and the rest of the exterior.

The contract Toth signed with the buyers stated that the inspection and report could not be used as a warranty of the condition of the house, and in the event the inspector was found liable for negligence or breach of contract, his liability would be limited to the $450 cost of the report.

After the inspection, Toth provided both a written and verbal report to Salgado and Calcaneo. He noted a number of structural deficiencies and told his clients that repair costs would be in the neighbourhood of $15,000 to $20,000. On that assurance, the buyers closed the deal.

After closing, the new owners discovered serious problems with the wooden structural beams of the house due to rot and moisture. As well, it turned out that the south part of the house was sitting on fill that had not been properly compacted and the structure itself was settling and unstable.

The buyers sued Toth, the sellers and the real estate agents. The case against the former owners was settled before trial and the claim against the agents was discontinued. The only defendants remaining at trial were Toth and his company.

After a five-day trial, Justice Grant Burnyeat awarded the buyers $192,920, representing the restoration costs of $212,920, minus Toth's original $20,000 estimate.

The judge ruled that Toth was negligent in not inspecting all of the structural beams and in failing to draw to the buyers' attention that the rot was much more widespread than he indicated to them.

The judge found that Salgado and Calcaneo would not have bought the house and would not have suffered damages had they known the full extent of the rot on the east and west side beams of the house. The judge also ruled that Toth was negligent in failing to advise the buyers to retain a geotechnical engineer before waiving the inspection condition in the offer. They relied on Toth's advice regarding the stability of the house and suffered damages as a result of that reliance.

Toth's repair estimate, said the judge, was "woefully inadequate." The judge decided that the repair estimate Toth provided led the buyers to believe that the structural expenditures would not be excessive and that the problems were not significant.

He awarded them the actual cost of the necessary structural changes, including engineering costs. With respect to the exclusion of liability in Toth's inspection contract, the evidence showed that the buyers never read the contract before signing it. The court decided that it was incumbent on Toth to draw to Salgado's attention the exclusion and waiver clauses in the contract and ensure that he understood them.

Since that didn't happen, the judge ruled the exclusion of liability paragraph didn't apply.

An award approaching $200,000 in a home inspection case is virtually unheard of in Canada. My guess is that the case will result in an end to "quickie" home inspections.

*Salgado v. Toth, 2009 BCSC 1515 (CanLII)

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Date: 2009-11-09
Docket: S073646
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Salgado v. Toth,


2009 BCSC 1515

Date:  20091109

Docket: S073646

Registry: Vancouver


Manuel Ignacio Salgado and Nora Gabriela Calcaneo



Imre Toth and 659279 B.C. Ltd. doing business as HomePro Inspections,  Grahame Harold Shannon, Shirley Yap Shannon,  The District of North Vancouver  and Cesar Parayno


Before: The Honourable Mr. Justice Burnyeat

Reasons for Judgment


Counsel for Plaintiffs:

F.R. Eadie


Counsel for Defendants Imre Toth and 659279 B.C. Ltd., dba HomePro Inspections:

G.S. Miller and C. Tham

Place and Date of Trial:

Vancouver, B.C.
May 25-29, 2009

Place and Date of Judgment:

Vancouver, B.C.
November 9, 2009

[1]               The Plaintiffs purchased a property in North Vancouver having a building lot that had a steep slope along the southern perimeter of the lot ( Property ) and a house consisting of an A?frame structure built during the early 1960s and an addition that was constructed in the late 1980s ( House ).

[2]               The former owners listed the Property for sale during the summer of 2006 at a listing price of $1,195,000.00.  By a September 15, 2006 contract of purchase and sale ( Agreement ), the Plaintiffs agreed to pay $1,095,000.00 for the Property with the purchase to complete on October 27, 2006.  The Agreement was subject to an inspection report and bank approval to the Buyers satisfaction on or before 5 week days after acceptance . 

[3]               At the recommendation of their real estate agent, the Plaintiffs retained the Defendants, Imre Toth and 659279 B.C. Ltd. doing business as HomePro Inspections ( Mr. Toth ) to prepare an inspection report for the Property.  Mr. Toth came to the Property, inspected the House, and provided both a written and a verbal report to the Plaintiffs.  Mr. Toth received $450.50 for his services. 

[4]               The Plaintiffs allege that Mr. Toth made certain statements about the cost of repairing the Property and that those representations constitute negligent misrepresentations that were relied upon by the Plaintiffs.  At the same time, the Plaintiffs allege that Mr. Toth conducted the inspection of the Property in a negligent manner and failed to identify and warn the Plaintiffs of a number of material defects.  Mr. Toth denies those allegations, and, in any event, relies on his contract with the Plaintiffs to limit any liability that he might have.

[5]               The Plaintiffs have settled with the Defendants, Grahame Harold Shannon and Shirley Yap Shannon, who were the former owners, have discontinued their action against Alfredo Lavaggi and Sussex Realty Corporation, carrying on business as Prudential Sussex Realty and the said Sussex Realty Corporation, and have discontinued their action against the District of North Vancouver and Cesar Parayno, an engineer.  Accordingly, the Plaintiffs do not seek from the Defendants any damages or other relief for any portion of the loss, damage or expense alleged which may be attributed to the fault of those Defendants and expressly waive any right in this Action to recover from the Defendants, Imre Toth and 659279 B.C. Ltd., any amount which the other Defendants would be liable to indemnify Imre Toth and 659279 B.C. Ltd. in third party proceedings.

[6]               By agreement, the parties accept that the cost of remedial work to remedy certain problems with the House totals $192,920.45, made up as follows:  (a)  A Frame Beams west side of the House ($35,000.00); (b)  A Frame Beams east side of the House ($18,800.00); (c) Stabilization of House ($56,800.00); (d) Engineering ($26,269.00, comprised of costs incurred to date of $16,269.00, and estimated future costs of $10,000.00); (e) West side deck removal ($9,360.00); (f) replacement of the west deck ($24,100.00); and (g) a shoring up of the east deck ($11,500.00).

[7]               With G.S.T. of $9,091.45, and a contingency of $22,000.00, the total cost of the required remedial work is $212,920.45.  From that amount, the Plaintiffs subtract the $20,000.00 that Mr. Toth estimated the remedial work would cost and claim $192,920.45, as well as pre-judgment interest and Scale  B costs.


[8]               Alfredo Lavaggi was a realtor who was contacted by the Plaintiffs.  Mr. Lavaggi introduced the Property to the Plaintiffs and acted as their agent with respect to the purchase of the Property.

[9]               At the recommendation of Mr. Lavaggi, Mr. Toth was requested to prepare a home inspection report.  Mr. Toth inspected the Property and House on September 21, 2006.  In accordance with his testimony at Trial, I find that Mr. Toth took about 30 minutes to inspect the roof and the rest of the exterior of the House .  I make no conclusions about how long Mr. Toth spent to inspect the interior of the House.

[10]           After completing his inspection, Mr. Toth met with the Plaintiffs, discussed what was in the written part of his report, discussed other matters about the Property and the House with the Plaintiffs, and received payment from the Plaintiffs for providing his services.  Sometime during that meeting, a contract with the Defendant, 659279 BC Ltd. doing business as HomePro Inspections, was signed by Mr. Salgado ( Contract ).  Ms. Calcaneo did not sign the Contract.  While the Contract defines 659279 BC Ltd. dba HomePro Inspections as the Inspector , the Contract is signed by Mr. Toth in a space above the words:  INSPECTOR IMRE TOTH 659279 BC LTD. HOMEPRO INSPECTIONS .

[11]           After receiving the written and verbal report of Mr. Toth, Mr. Salgado phoned Mr. Lavaggi to discuss what he had been told.  At his March 12, 2008 Examination for Discovery, Mr. Lavaggi was asked the following questions and gave the following answers:

Q.        But he [Mr. Salgado] might have said there s a reference here to a structural problem?

A.         He did mention, as I said to you before, that he was told there was structural and foundation problems.

Q.        Did he indicate to you what the extent of those problems were?  Other than

A.         He talked about it and that they were major, that they were significant.

Q.        Did he say what the dollar value of the problem was?

A.         I don t recall.

[12]           The Plaintiffs removed the subject clauses on the Agreement, the purchase in the name of both Plaintiffs completed on schedule, and the Plaintiffs took possession of the Property. 


[13]           The Contract signed by Mr. Salgado on September 21, 2006 contained a number of provisions, including the following (capitalization and bold print as set out in the Contract):

1.  The INSPECTOR will perform a VISUAL INSPECTION of the readily accessible and visible areas of the major systems and components of the Primary Residence on the Property and certain built-in equipment and improvements.  The inspection and report are not intended to reflect on the market value of the Property nor to make any recommendation as to the advisability of purchase.

2.  The condition of certain systems, components and equipment will be randomly sampled by the inspector.  Examples of such systems, components and equipment are window/door operation and hardware, electrical receptacles, switches and lights, cabinet/countertop mounts and functions, insulation depth, mortar, masonry, paint and caulking integrity and roof covering materials.  Furniture, rugs, appliances, stored items, etc. will not be moved for the inspection.

3.  The INSPECTOR will give a professional opinion on whether those items inspected are performing their intended function at the time of the inspection or are in need of immediate repair. The inspection and report are based upon observations of conditions that exist at the time the inspection was performed.

4.  Cost estimates, if provided, are ballpark estimates only and are not intended to be relied upon by any person for accuracy.  The CLIENT should obtain written bids from qualified licensed contractors in order to determine the possible cost of repairs.

5.  This inspection is performed in accordance with the Code of Ethics and Standards of Practice of the Canadian Association of Home and Property Inspectors (CAHPI), a copy of which is attached to this report. 

6.  The Client is encouraged to participate in the visual inspection process and accepts responsibility for the consequences of electing not to do so, i.e. incomplete information being available to the Inspector.  This Client s participation shall be at the Client s own risk for injuries, falls, property damage, etc;


13.  It is understood and agreed that should the INSPECTOR be found liable for any loss or damages resulting from a failure to perform any obligations, including but not limited to negligence, breach of contract, or otherwise, then the liability of the INSPECTOR shall be limited to a sum equal to the amount of the fee paid by the CLIENT for the Inspection and Report.

15.  In the event that the CLIENT claims damages against the INSPECTOR and does not prove those damages, the CLIENT shall pay all legal fees, arbitrator/mediator fees, legal expenses and costs by the INSPECTOR in defence of the claim.

16.  By signing the Property Inspection Contract, the CLIENT acknowledges, covenants and agrees that:

a)  The CLIENT understands and agrees to be bound by each and every provision of this contract;

b)  The INSPECTOR has not made any representations or warranties other than those contained in the Contract;

c)  The TOTAL fee payable at the time of the visual inspection of the Subject Property shall be $450.50.

d)  The CLIENT shall pay the fees described above to the inspector without set-off or deduction.

[14]           At Trial, Mr. Toth stated that he understood that the Plaintiffs would be available at 12:00 noon on the 21st so that he could provide them with his presentation regarding the inspection.  The Plaintiffs did not arrive as Mr. Toth anticipated:

I cannot recall exactly the time when they arrived.  And I believe I expressed my frustration, because we agreed upon a time, and I felt ignored and disrespectfully treated, so I was having quite a [frustrating] time.  I expressed them I have other things to do than waiting for people, and I scheduled this, as I told, my presentation between 12:00 and 1:00, and I have other things to do.  And that was what I said, and then I started discussing the report.

[15]           At his December 26, 2008, Examination for Discovery, Mr. Salgado stated that he arrived at the Property at about 12:30.  I conclude that the presentation of Mr. Toth took between 30 and 45 minutes, and, in addition to the written and verbal report provided by Mr. Toth, Mr. Toth and the Plaintiffs visited some of the areas within the House during that time.  At Trial, Mr. Toth was asked how long he spent after the presentation of the written and verbal report going through the House with the Plaintiffs and he stated:  15, 20 or more minutes after the structural presentation.

[16]           At Trial, Mr. Toth stated that his contract would usually be signed by both parties at the beginning of the inspection if all parties were present but, if not present, then at the time before the inspection was discussed.  At Trial, Mr. Toth stated that it was his usual practice that approximately 99% of his written report was fully blank until the presentation with my client starts , but that, if the client was not present, then for time management and killing the empty time , he would fill in most if not all of the written portion of his report prior to the client being present.  Mr. Toth stated that the Contract was signed before any kind of presentation on September 21, 2006.  I find that the Contract was signed after virtually all of the written portion of the report was added to the report. 

[17]           At his October 17, 2007 Examination for Discovery, Mr. Toth stated that he completed the report, invited the Plaintiffs to sit down, and then introduced this inspection report system .  At Trial, Mr. Toth stated that, after Mr. Salgado filled in his name and address on the Contract, he then said to Mr. Salgado:

This is the property inspection contract.  Opening the book, showing the contract, I told, in Canada, every home inspection conducted by a member of the national association has to have this written agreement signed.  I did my part.  I m asking him to review it and fill the top part and sign it at the bottom.  He reviewed it and then signed it, filled it and signed it.

Since I m not sure my clients how much they understanding or reading from my contract, this is my standard practice, to briefly point out three major elements.  I m calling them three major elements.  Is the number 1 is inspection this regarding to the scope of inspection, sentences 1 to 4. I briefly summarizing those section as the nature of my inspection is visual inspection. ...

And then second cornerstone or significant information is I m following the standard of practice and code of ethics ... and that was the 5 and 6.  And I called the so-called sentence number 9 printed in bold capital lettering, I named it as a third major information, it telling inspection is not an insurance policy, not a warranty or assuring or one of the any conditions.  This is a standard no matter how much time my clients spending reading or not reading, I m pointing always out these three areas.


[18]           The written report prepared by Mr. Toth started with a The Big Picture/Summary page.  The form of report was prepared by Mr. Toth after consulting with a lawyer and after incorporating the recommended contract form of the Canadian Association of Home and Property Inspectors of B.C. ( CAHPI (BC) ).  The Big Picture/Summary page set out eight separate areas of the inspection, rating each of the eight sections as average, above average or below average, as well as setting out major points of concern , setting out significant qualities , and setting out whether major/minor repairs were recommended . 

[19]           The rating for STRUCTURE was half-way between average and below , and all of the words Major/Minor Repairs Recommended were underlined.  The ELECTRIC, PLUMBING, KITCHEN and EXTERIOR are all rated as Average .  The HEATING/VENTILATION/AC and the INTERIOR were rated as between average and above average.  The UNDER HOUSE SPACE was also rated as between above average and average.  Minor repairs were recommended for the ELECTRIC and minor repairs and maintenance were Recommended for the PLUMBING and ELECTRIC components.  Maintenance was recommended for the HEATING/VENTILATION/AC COMPONENT.  The SIGNIFICANT QUALITIES were noted as being 200 A service , Newer furnace , and Well maintained clean interior .  The MAJOR POINTS OF CONCERN for the structure were described as follows:  To fix-up structural deficiencies .  The comments under the headings MAJOR POINTS OF CONCERN and SIGNIFICANT QUALITIES were handwritten onto the report form.  The next part of the written report dealt with each of the eight components and comprised two pages for each of the eight components. 

[20]           On the first page for the component STRUCTURE , the following was noted:

settlement noted:                        ? Slight                     cid:image002.png@01C9E391.9A645700 Moderate   cid:image002.png@01C9E391.9A645700 Ongoing?

soil erosion noted:                     ? No                        cid:image002.png@01C9E391.9A645700 Yes  South SW

[21]           The only marks or words that were not on the printed form were the question mark after the word ongoing and the words South SW after the word Yes .  There was a check mark beside the printed words:  check with professional engineering/pest control contractor or _________ for complete information .

[22]           The printed heading on the next page dealing with STRUCTURE, was: SIGNIFICANT STRUCTURAL DEFICIENCIES .  On this page, there were number of printed Descriptions .  There was a column where a tick mark could be placed to indicate that a particular description applied, a second column to write in the Location where the description applied, and two columns to allow tick marks to be added to indicate whether Repair or Upgrade or both were suggested.  The following printed descriptions had tick marks beside them, with the Location, Repair and/or Upgrade columns as noted:

(a)   Unstable soil conditions/erosions (location being S, SW , and repairs and upgrade ticked);

(b)   Solitary foundation movements (location being S side, deck, SW (?), and repairs ticked;

(c)   Floor sag (location being SW living rm (bsmt) settled to South , but without repair or upgrade ticked); and

(d)   Wood deck unstable, lateral support missing (with both repair and upgrade ticked).

[23]           In addition to those descriptions that were printed on the form, the following additional comments were handwritten in by Mr. Toth:

(a)   Wood decks 6x6 posts have no bracing in any directions, new braces must be added.  N side framing (posts and beam) moved, doesn t support the deck any more.  Raise the top of beam to support joists.

(b)   SW deck structure solitary foundations have major settlements, post base soil connection structure has no proper connection to house.  To lift-up, and reinforce foundation & posts.

(c)   Two West side timber rafters near foundations are decayed, water damaged.

(d)   SE corner of garage conc. structure cracked.

For each of (a), (b) and (c), the repair column was ticked but the upgrade column was not.

[24]           The other seven areas of inspection contained somewhat unimportant notations on the two printed pages for each of the seven separate areas of the inspection:

(a)   UNDER HOUSE SPACE mouse droppings in furnace rm. (with the SIGNIFICANT UNDER HOUSE DEFICIENCIES being noted as Occasional seepage possible, to drain backyard! and Property grading pooling water against house N. side (backyard) , with both noting a suggested Upgrade );

(b)   ELECTRICAL with the SIGNIFICANT ELECTRICAL DEFICIENCIES notations Wires / boxes uncovered / loose Furnace rm, Exterior E and Tree branches / vines interfering with cable , with both noted as requiring Repair ;

(c)   PLUMBING a number of repairs were recommended, but nothing of a particularly significant nature;

(d)   HEATING/VENTILATION/AIR CONDITIONING (with the only SIGNIFICANT H/V/AC DEFICIENCIES being Fireplace damper warped, not closing Family rm );

(e)   KITCHEN had two matters noted:  Refrigerator handle loose and Countertops have swollen joints ;

(f)     INTERIOR was a notation Mouse droppings in furnace room .  There were a number of SIGNIFICANT INTERIOR DEFICIENCIES noted but none that bear on the questions between the parties involving this litigation;

(g)   EXTERIOR , the SIGNIFICANT EXTERIOR DEFICIENCIES were noted as:  Retaining wall has no weep holes, add new, drill drains in conc. wall along stair , Finished grading high, lowering 6 below siding required NE, E , Yard has no proper drainage pooling rain water N patio area , Debris to remove from E side , and 50% of garage roof, 100% of N overhang roof, 90% of walkway roof, ponding water, new drainage recommended at low points .  Upgrades were recommended for all those deficiencies .

[25]           After the first significant rainfall, the Plaintiffs noted leakage from the roof above the area that had been established as a family room.  As a result, repairs were made to the roof.  The Plaintiffs had discussions with a contractor who provided them with estimates of what it would cost to undertake the repairs of the areas in the report of Mr. Toth that required attention.  The Plaintiffs also had William E. Clayton undertake an inspection of the Property


[26]           Mr. Clayton went to the Property in mid-December 2006 and undertook a cursory inspection.  That involved taking no notes but taking photographs which are in evidence.  The photographs taken in December 2006 clearly show well-established rot in a number of the A?frame members.  While the written report of Mr. Toth had indicated:  Two West side timber rafters near foundation are decayed, water damaged and while Mr. Toth did not inspect the structural members on the east side of the A?frame part of the House as he did not attempt to access a room which housed the east side structural members, Mr. Clayton found substantial problems with almost all of the A?frame beams.

[27]           At Trial, Mr. Clayton was qualified to provide an expert opinion regarding home inspections and the responsibility of home inspectors.  His May 13, 2009 opinion was in evidence.  In that opinion, he was asked the following questions and provided the following answers:

A?frame Beams

Q1.      Please advise if there is any material difference in the state of the structure since your inspection of the structure in November or December of 2006.

A1.      Since my inspection on 17 December 2006, the rot conditions in all visible portions of the A?frame members appear to have progressed and are more extensive.  At the time of my 2006 inspection, the rot appeared to be well established.

Q2.      Please examine the balance of the exposed A?frame rafters on the west side of the house and advise whether or not they are also in need of repair.

A2.      I examined all the exposed A?frame members on the west side of the house May 5th and advise that, in my opinion, all of the members, except the first one at the northwest corner, need extensive repairs and replacement of the majority of the exposed exterior portions.

Q3.      Please examine that portion of the structure [the horizontal beam at the south end of the A?frame structure] and advise as whether or not it is need of repair.

A3.      I inspected the southernmost beam in the crawlspace.  It is in an advanced state of rot.  My knife easily penetrated 3 into the members.  Water was weeping out of the wood.  There were numerous fungal organisms growing on the wood members.  In my opinion, these members will need to be replaced as they cannot be repaired.

Q4.      Please describe the state of the A?frame rafter on the East side and advise whether or not they are in need of repair.

A4.      Examination of the east side, southernmost A?frame reveals extensive rot immediately above the deck.  It appears that an attempt has been made in the past to cover-up the condition or hide the condition possibly before the last time the house was painted.  In my opinion, repairs are required.

Q5(a).  Once the house inspector determined that two of the rafters were rotten, what steps should the house inspector have taken, what should the house inspector have reported to the client and what recommendations should the house inspector have made to the client.

A5(a)   In my opinion, a prudent inspector in this market place at that time, would have checked the condition of all of the similar structural members and reported the condition in writing and in discussion with the client and would most likely have physically shown the client the condition.  A prudent inspector would have recommended that a (structural) engineer, experienced in heavy timber construction be engaged to review the condition and make further recommendations with respect to repair and costs for repairs.

Q5(b)   In order to be consistent with the standards in the industry, what steps would a house inspector take with respect to the inspection of the A?frame rafters on the East side of the A?frame structure, particularly given the fact that he had identified two of the rafters on the West side of the structure as being rotten.

A5(b)   The standards used by Mr. Toth and referred to in his Property Inspection Contract are the Canadian Association of Home and Property Inspectors (CAHPI) Standards of Practice.  Those Standards only require that the inspector inspect and probe ... a representative number of structural components where deterioration is suspected or where clear indications of possible deterioration exist.

In spite of the conditions imposed by the Standards, and as explained in A5(a) above, I believe that a prudent inspector would have inspected and reported on all of the A?frame members, not just some of them as required by the Standards.

Stability of House

Q2.      Given those observations, in order to be consistent with the standards in the industry, what steps would a house inspector take and what would be reported to the client and recommended to the client?  In this regard, please make whatever comments you deem appropriate with respect to the reference in the house inspection report prepared by Mr. Toth to settlement and advise whether or not you believe those comments are consistent with the standards in the industry give the conditions observed.

A2.      The CAHPI Standards of Practice require that an inspector report on those systems and components inspected which, in the professional opinion of the inspector, are significantly deficient or are near the end of their service life.

In my opinion, the condition of the A?frame members were significantly deficient at the time of the inspection and should have been reported as such.  Also in my opinion, the location of the foundations very close to the juncture between the house construction site and the steep slope, regardless of their condition, should have caused a prudent inspector to recommend that his clients consult a geotechnical engineer prior to completing their purchase decision.

In his report Mr. Toth indicates on The Big Picture / Summary page that the structure is below average, and that the MAJOR POINTS OF CONCERN: are To fix-up structural deficiencies

Further in the report in the Structure page, Mr. Toth notes 1) Moderate settlement and suggests that it may be ongoing 2) soil erosion a [sic] the south SW and 3) a check mark beside Check with professional Engineer/pest control contractor but does not specifically indicate the exact concern.

On the Significant Structural Deficiencies page, Mr. Toth indicates that there are Unstable soil conditions / erosion at the S, SW which require repair & upgrading and that solitary foundation movements at the S side dec, SW (?) need repair, and that floor sag SW living rm (bsmt) settled to South without any recommendation;

and that wood deck unstable, lateral supports missing and in need of repair and upgrading;

and that wood deck s 6x6 posts have no bracing in any directions, new braces must be added.  N side framing (posts and beam) moved, doesn t support the deck any more.  Raise the top of the beam to support joists.   Repair needed;

and that SW deck structure, solitary foundations have major settlements, post bases have soil connections, structure has no proper connection to house. To lift-up and reinforce foundations & posts   Repairs needed;

and that two West side timber rafters near foundations are decayed, water damaged.   Repairs needed.

Mr. Toth has reported many of the structural deficiencies and recommended that his client should check with professional engineer .  In this respect, the report appears to meet the intentions of the Standards of Practice. but, in my opinion, Mr. Toth s report is deficient in as much as it does not make any recommendation to have a geotechnical review of the Property and that the report does not clearly present the significance of the problems observed.

Q3.      Assuming that Mr. Toth verbally advised that the slope stability Issue or settlement issue related to the supports for the decks on the south side of the A?frame portion of the structure and that the cost of repair would be in the order of $15,000, was Mr. Toth s advice consistent with the standards of the industry.  If not, why not?

A3.      The Standards of Practice are silent on the provision of repair estimates.

Mr. Toth s contract states that 4. Cost estimates, if provided are ball-park estimates only and are not intended to be relied upon by any person for accuracy.  The CLIENT should obtain written bids from qualified licensed contractors in order to determine the possible cost of repairs.

There are no repair costs provided in Mr. Toth s written report, therefore any cost estimates provided must have been verbal.  Some inspectors provide order-of-magnitude estimates verbally to their clients, and in this respect, Mr. Toth appears to be consistent with industry practices although the provision of such estimates are beyond the requirements of the Standards of Practice.

If Mr. Toth did provide a repair estimate of $15,000, it would appear to be insufficient, based on the significance of the deteriorated condition of the structure and decks that were evident at the time of his inspection.  Given the limited time that Mr. Toth spent on site and the time required to adequately inspect and report on this somewhat complex structure, there was little time available for Mr. Toth to consider and provide a ball-park estimate that would be a reasonable reflection of the conditions noted in the house.

[28]           Mr. Clayton summarized his findings regarding the beams of the House as follows:










No rot evident

No beam visible



Rot north & south

Rot north & south

Bent & beam repaired, not original.

Rot in both original and repaired beams.


Rot north & south

Rot north & south

Bent & beam repaired, not original.

Beam rot in new/repaired portion only


Rot north & south

Rot south

Bent & beam repaired, not original.

Rot in original beams only.


Rot north & south

No not visible.



No rot visible

Rot north

Rot in both original and repaired beams.






Rot south

Rot north & south

Original bent without splices.


Rot north & south

Rot north & south

Original bent without splices.  Rot in bent above deck & in crawlspace.



[29]           In order for negligence to be established, the Plaintiffs must establish on a balance of probabilities that the Defendants owed the Plaintiffs a duty of care, the standard of care required of a home inspector, that the Defendants breached the duty of care owed to the Plaintiffs by failing to meet the requisite standard of care, and that the breach of the duty of care caused the Plaintiffs to suffer damages.

[30]           In order to establish the tort of negligent misrepresentation, it is necessary to prove that there was a duty of care based on a special relationship between the parties, a representation was made by one party to the other, that representation was false, inaccurate or misleading, that misrepresentation was made negligently, the person to whom the representation was made must have reasonably relied on the representation, and the reliance must have been detrimental to that person with the consequence of the person suffering damages:  Queen v. Cognos Inc., 1993 CanLII 146 (S.C.C.), [1993] 1 S.C.R. 87.

[31]           The Plaintiffs allege that the Defendants breached their duty of care by failing to inspect all of the A?frame beams for rot and moisture, by failing to fully advise the Plaintiffs regarding the extent of the structural problems relating to the House, by failing to advise the Plaintiffs that a structural engineer should be retained by them, and that Mr. Toth made various statements regarding the cost of correcting the problems that he found, and that the statements amounted to negligent misrepresentation.

[32]           It is not disputed by the Defendants that the Defendants owed the Plaintiffs a duty to conduct the home inspection and prepare the report in a competent manner.  The Defendants submit that this duty was subject to the terms of the Contract which specified that the standard against which their competence would be measured would be the Standards of Practice set out by the Canadian Association of Property and Home Inspectors.

[33]           CAHPI publishes a Code of Ethics and Standards of Practice ( Standards ) for its members.  Mr. Toth is a member of CAHPI.  Mr. Toth is also a member of the British Columbia Association.  The Standards of the national organization includes the following statement:  The Standards are a set of guidelines for home inspectors to following the performance of their inspections.  They are the most widely-accepted home inspection guidelines in use, and include all the home s major systems and components.  

[34]           The Standards provide in part:


2.1  The purpose of these Standards of Practice is to establish a minimum and uniform standard for private, fee-paid home inspectors who are members of one of the provincial/regional organizations of CAHPI.  Home inspections performed to these Standards of Practice are intended to provide the client with information regarding the condition of the systems and components of the home as inspected at the time of the Home Inspection.

2.2  The Inspector shall:

A.      Inspect:

1.  readily accessible systems and components of homes listed in these Standards of Practice.

2.  installed systems and components of homes listed in these Standards of Practice.

B.      report:

1.  on those systems and components inspected which, in the professional opinion of the inspector, are significantly deficient or are near the end of their service lives.

2.  a reason why, if not self-evident, the system or component is significantly deficient or near the end of its service life.

3.  the inspector s recommendations to correct or monitor the reported deficiency.

4.  on any systems and components designated for inspection in these Standards of Practice which were present at the time of the Home Inspection but were not inspected and a reason they were not inspected.


3.1  The inspector shall:

A.      Inspect:

1.  the structural components including foundation and framing.

2.  by probing a representative number of structural components where deterioration is suspected or where clear indications of possible deterioration exist.  Probing is NOT required when probing would damage any finished surface or where no deterioration is visible.

B.      describe:

1.  the foundation and report the methods used to inspect the under-floor crawl space.

2.  the floor structure.

3.  the wall structure.

4.  the ceiling structure.

5.  the roof structure and report the methods used to inspect the attic.

3.2  The inspector is NOT required to:

A.   provide any engineering service or architectural service.

B.   offer an opinion as to the adequacy of any structural system or component.


4.1  The inspector shall:

A.   Inspect:

1.  the exterior wall covering, flashing and trim.

2.  all exterior doors.

3.  attached decks, balconies, stoops, steps, porches, and their associated railings.

4.  the eaves, soffits, and fascias where accessible from the ground level.

5.  the vegetation, grading, surface drainage, and retaining walls on the property when any of these are likely to adversely affect the building.

6.  walkways, patios, and driveways leading to dwelling entrances.

B.  describe the exterior wall covering.

[35]           While paragraph 5 of the Contract states that the CAHPI Code of Ethics and Standards of Practice are attached to the Contract, there is nothing in evidence which would allow me to conclude that this was the case.  Accordingly, I cannot conclude that it was agreed between the parties that the inspection would be performed in accordance with the CAHPI Code of Ethics and Standards of Practice .  Even if I am wrong in this regard and, in any event, I am satisfied that the Standards are only guidelines, and that a determination that the inspection had been undertaken in accordance with the Standards would not preclude a finding that the inspection was carried out negligently.  In this regard, Mr. Toth at Trial stated:

Standard of Practice sets minimum expectations for the home inspectors, what they have to render during and after the inspection.  I believe this is the standard, like the Bible, of every home inspector as a minimum requirement.  Some inspectors try to exceed it.  Some others never target to exceed it.  I feel myself whatever time circumstances exist, I try to go even beyond that.


[36]           The first part of the claim of the Plaintiffs relates to rotten A?beam structural members.  The older A?frame portion of the House is supported by horizontal and vertical beams.  The Plaintiffs submit that the ends of most of those beams were rotten at the time of the inspection by Mr. Toth, Mr. Toth did not identify all of the rotten horizontal and vertical beams, Mr. Toth did not advise them that he had not inspected all of the horizontal and vertical beams, and Mr. Toth underestimated the cost of repair of the two beams that he did identify as rotten when stating that the cost of repair would be in the neighbourhood of $4,000.00.  It is now apparent that the estimated cost of replacing all of the rotten beams is in the neighbourhood of $90,000.00, and that the cost of repairing the two beams that he did identify as rotten is the neighbourhood of $35,000.00.

(a)   Beams on the East Side of the House

[37]           I find that Mr. Toth made no inspection of the vertical beams on the east side of the House.  I find that an inspection of two of those beams would have been easily accessible through an unlocked door off the lower balcony.  This door led into a room that was otherwise inaccessible from inside the House.  I find that even a cursory examination of the two beams in this area would have revealed to Mr. Toth that they were rotten.

[38]           At his October 17, 2007 Examination for Discovery, Mr. Toth could only state that he could not recall if:  ... that room was or was not available for inspection.   At Trial, Mr. Toth was asked whether he had tested any of the beams on the east side of the house, and stated:  Unfortunately not I cannot exactly recall why ever since, it is kind of a mystery for myself.  I have no proper explanation why.  I just simply don t remember.   I accept the evidence that the door to the room could not be locked from the outside so that there was no impediment to Mr. Toth entering the area and discovering that there was considerable rot in two of the east side beams.

[39]           Under cross-examination, Mr. Toth described the area as a crawl space but I find that is not accurate.  From the photographs in evidence, it is clear it is just a room off the exterior of the House.  As to why he did not attempt to go through the door, Mr. Toth stated under cross-examination:

I make effort to open every solid door, but I cannot easily identify where they lead to, and then I supposed to open that door.  I cannot recall which way I find it, closed, which way I find it even sticked to the frame or for any way it s not opening.  It appeared not to opening, and that s what I expect, and that s what I my statement about. ...

That was a typical door of a house, and that was not marked as a crawl space door, and once I cannot or I appeared couldn t go through, I legitimately  expected to be access the same room from the inside, which unfortunately never happened. 

If the door is not opening, it s not readily accessible.

... because I don t remember what kind of way I used to push the door, bang the door or tried to gently open.  One way or the other, the door didn t open and I didn t go in.  It was not readily accessible. ...

If I would be aware that room has no interior connection and that has no other access way, then I would ask I would try to make effort.

[40]           Mr. Toth stated that it was his usual practice to go clockwise when inspecting a house and, regarding any doors that he finds, he would attempt to enter the door:

... I find the doorway which is not clear where it goes, I try to go through or clarify the door, where it goes.

So in our case, we have a solid door on that so-called crawl space, exactly the same looking and full-size door than the door beside of it, or other doors.  So I assume, but I cannot hundred percent recall it, that information.  I may find it locked or not opening at some point, for any reason not opening, and then I assume there will be another inside room, another room, but I will approach from the inside of the building.  Which unfortunately never happened.

[41]           Even if Mr. Toth concluded that he could not have outside access to what was behind the door, he should have come back to that space when he determined in his later inspection of i

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Bob Aaron is a Toronto real estate lawyer and frequent speaker to groups of home buyers and real estate agents.
He can be reached by email at, phone 416-364-9366 or fax 416-364-3818.

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