Hidden Defects or Missed Defects? Court Rules Home Inspector Failed Standard of Care

Home inspections are a cornerstone of residential real estate transactions, providing buyers with crucial information about a property’s condition before they commit to purchase. But what happens when an inspector’s report falls short? A recent Ontario Superior Court decision offers important guidance for transactional real estate lawyers advising clients through the purchase process.

The Facts

In Miller Desjardins v. JF Lajoie Construction Inc., 2025 ONSC 2522, homebuyers Monique Miller and Michel Desjardins sued home inspector Jacques Lajoie after discovering significant defects in their Alexandria property shortly after closing. The plaintiffs had made their purchase conditional on a satisfactory inspection, and their realtor arranged for Lajoie to inspect the property for a fee of $425.

Critically, neither the plaintiffs nor their realtor signed a written inspection contract with Lajoie, meaning there was no contractual limitation of liability clause, a detail that would prove significant to the outcome.

Lajoie provided a 13-page inspection report that the court ultimately found inadequate. Within days of taking possession, the plaintiffs experienced water leaks from the dishwasher, roof, windows, and patio door. Subsequent inspections by other professionals revealed substantial deficiencies in the foundation, roof, and windows that Lajoie had either failed to identify or inadequately reported.

The Standard of Care

Justice Flaherty applied the industry standards established by the Canadian Association of Home and Property Inspectors, which were in effect at the time of the 2020 inspection. These standards require inspectors to report in writing on significant deficiencies that are visible during a non-invasive visual inspection.

The defendant argued that industry standards shouldn’t apply to him because he wasn’t a member of the association and because the inspection was conducted on an urgent basis. The court rejected both arguments, holding that the standard of care is determined by what a qualified home inspector, acting reasonably, would do in similar circumstances, regardless of membership status or time constraints.

Notably, Lajoie initially testified that he was a certified home inspector but later acknowledged under cross-examination that he held no home inspection certification and had not been a member of any professional home inspection association for approximately 20 years.

Key Holdings

The court found Lajoie liable for both negligence and negligent misrepresentation, making several important findings:

1. Written Reporting is Required: Lajoie’s reliance on verbal comments made during the inspection did not satisfy the standard of care. The court emphasized that industry standards define reporting as “to communicate in writing.” The written report was particularly important in this case since one plaintiff wasn’t present at the inspection and the attending plaintiff was admittedly distracted and had limited construction knowledge.
2. No Contract, No Limitation: Because no written contract existed between the parties, there was no contractual limitation of liability. However, the court found no breach of contract claim could succeed because the plaintiffs themselves provided no consideration and it was the realtor who paid Lajoie’s fee.
3. Damages Not Limited to Inspection Fee: The defendant argued that damages should be proportionate to the modest $425 inspection fee. Justice Flaherty rejected this argument, clarifying that while a home inspection need not be exhaustive, when an inspector breaches the standard of care by failing to report on visible significant deficiencies, liability is not capped at the inspection fee.
4. Expert Evidence Matters: The plaintiffs’ expert, Charbel Azzi, testified about industry standards and the deficiencies that should have been identified. The defendants provided no expert evidence in response. This proved crucial to establishing both the standard of care and the breach.
5. No Contributory Negligence: The court rejected arguments that the buyers were contributorily negligent. Justice Flaherty noted there was no evidence establishing what a prudent home purchaser must do, and emphasized that the plaintiffs actually acted with more diligence than most of Lajoie’s clients by reviewing the report and calling with questions.

Damages Assessment

The court awarded $62,918.75 in damages, comprising:

• $33,193.75 for foundation repairs (including 13% tax)
• $14,058.33 for roof replacement (including tax)
• $15,666.67 for window and door replacement (two-thirds of the estimated cost)

The court denied claims for cosmetic improvements and minor repairs, finding no evidence that these issues would have prevented the plaintiffs from completing the purchase. The court also rejected claims for additional foundation work that was insufficiently particularized and unproven as necessary.

Practice Points for Transactional Lawyers

This decision offers several important takeaways for lawyers acting for purchasers:

1. Review Inspection Reports Carefully: Don’t assume a home inspection report is adequate simply because it’s been provided. If a report lacks clarity, fails to describe components, or uses undefined terminology, consider advising your client to seek clarification or obtain a second opinion before waiving conditions.
2. Understand the Limits: Remind clients that home inspections are visual and non-invasive. They won’t identify every defect, particularly concealed conditions. However, inspectors must report on significant deficiencies that are visible during such an inspection.
3. Consider Written Contracts: While this case involved no written contract (which eliminated any limitation of liability clause), in cases where inspection contracts exist, carefully review their terms with your client, particularly any limitations on liability.
4. Document Everything: Ensure clients understand the importance of the written report over verbal assurances. If an inspector makes verbal comments during the inspection, those should be reflected in the written report to be relied upon.
5. No Privity Required: This case confirms that purchasers can sue inspectors in negligence and negligent misrepresentation even without contractual privity, provided the other elements of these torts are established.

The Miller Desjardins decision serves as a reminder that home inspections play a vital role in real estate transactions, and that inspectors who fail to meet professional standards will be held accountable—potentially for amounts far exceeding their modest fees.