In Connelly v. Garito, 2025 ONSC 6449, Justice Cullin delivered a sobering reminder that homeowners who attempt significant structural repairs without proper expertise or permits may face liability to future purchasers, even years after the sale closes.
The Facts
The Garitos purchased a residential property in South Porcupine in 2012 and moved in approximately two years later. After discovering frost buildup and cold air infiltration along the south foundation wall, Mr. Garito took matters into his own hands. Rather than hiring a professional or obtaining a building permit, he constructed a substantial concrete wall, which was eight inches thick, four feet high, and reinforced with rebar, in front of the failing foundation wall. The area was then framed, insulated, and drywalled, effectively concealing the underlying structural problem.
In 2018, the Garitos sold the property to Joshua Connelly. Their Seller Property Information Statement (SPIS) disclosed that there had been a “foundation issue” on the south wall in 2014 due to frost, but stated it had been addressed and caused no further problems. The SPIS also disclosed that they had completed renovations without a building permit, including the addition of the concrete wall.
Within months of taking possession, Connelly began experiencing severe problems: extreme cold in the basement, frozen pipes, ice dams, and water infiltration. An engineering inspection revealed that the south foundation wall had failed and was buckled inward, a serious structural defect that the second wall was inadequate to address.
The Court’s Analysis
Negligent Construction by a Non-Contractor Homeowner
Justice Cullin confirmed that homeowners who undertake construction work owe a duty of care to subsequent purchasers when the work involves major structural repairs. Applying the principles from Roy v. Thiessen, 2005 SKCA 45, the court held that the standard of care required of Mr. Garito was equivalent to that of a reasonably competent contractor.
The court found this heightened standard appropriate given that Mr. Garito clearly possessed construction knowledge since he had installed rebar and poured a large concrete wall. With that knowledge came responsibility.
The court identified the defect as not the original failed foundation wall, which pre-existed the Garitos’ ownership, but rather Mr. Garito’s deficient repair attempt. The second wall did not comply with the Building Code, was structurally inadequate to address the failing foundation, and failed to address the source of cold air infiltration. These deficiencies created substantial dangers to occupants, including prolonged cold exposure, flooding risks from frozen pipes, and entry points for wildlife.
Negligent Misrepresentation and the SPIS
Both Mr. and Mrs. Garito were found liable for negligent misrepresentation regarding the structural integrity of the property. The court accepted that Mr. Garito was aware the south foundation wall was failing when he built the second wall, finding it illogical that he would undertake such substantial work merely to address frost buildup. Mrs. Garito, who had watched her husband complete the repair and approached it “as a couple,” possessed the same knowledge but failed to disclose the structural problem in the SPIS.
Applying Queen v. Cognos Inc., [1993] 1 SCR 87, Justice Cullin found that the SPIS created a “special relationship” giving rise to a duty of care. The Garitos’ representation that there were no structural problems was untrue, and Connelly reasonably relied on this representation in a latent defect situation where the problem was hidden behind finished walls.
The Reasonable Reliance Distinction
The court drew an important distinction regarding what constitutes reasonable reliance on an SPIS. While Connelly reasonably relied on the representation about structural integrity, which was a latent defect, he could not reasonably rely on the representation that there were no moisture or water problems.
Why? The home inspection report clearly identified evidence of water infiltration on the north foundation wall, describing the issue as requiring “immediate” repairs. This was a patent defect, which was observable and documented before closing. When faced with conflicting information between the SPIS and the home inspection, Connelly’s failure to investigate further was unreasonable.
Based on the foregoing, the court found the Garitos liable for damages for the replacement of the south foundation wall, waterproofing, and basement restoration, totaling $41,383.67.
Practical Takeaways for Transactional Lawyers
- Advise clients about DIY repair risks: Homeowners who undertake significant structural work without permits or professional oversight create potential liability that survives the sale. The “I fixed it myself” disclosure may not shield sellers from claims if the repair was inadequate.
- SPIS disclosure must be complete and accurate: Simply disclosing that historical issues were “repaired” is insufficient if the repair was deficient or the underlying problem persists. Sellers must disclose what they know about the adequacy of repairs, not just that repairs were attempted.
- Home inspections don’t eliminate reliance on the SPIS for latent defects: Purchasers can reasonably rely on SPIS representations about hidden structural issues that a standard home inspection cannot detect. However, when home inspectors identify problems that contradict SPIS representations, purchasers investigate further or assume the risk.
- Spousal liability for misrepresentation: Even spouses not directly involved in construction may face liability if they possessed knowledge of defects and signed an inaccurate SPIS.
- Document the scope of restoration costs: Connelly succeeded in recovering damages for foundation replacement and interior restoration, but the court carefully parsed which costs were attributable to the defendants’ liability. Detailed invoices and estimates are essential.
Conclusion
Connelly v. Garito reinforces that amateur structural repairs create long-term legal exposure. For transactional lawyers, this case underscores the importance of thorough SPIS review and the need to advise clients about the limitations of DIY repairs, particularly when those repairs involve major structural elements.
