The nightmare being experienced by Teresa and Patrick Campbell is a lesson for all potential homebuyers: A home inspection is no guarantee of a problem-free house purchase.
The Campbells, who live in Elton, Man., quit their jobs a few years ago to fulfil a dream of opening a daycare facility for disabled kids.
They initially ran it out of their home but decided they needed a bigger place to offer more amenities to the children they were caring for. They thought they'd found it in a property in Elton, which included a cabin-style home and a swimming pool on a scenic 4.5-acre lot.
“When we first drove up, my first impression was, this is it. We’re home,” Teresa Campbell told CBC News.
"The house passed everything. We got our licenses from both agencies that we work with. The home inspector said mild to moderate upkeep."
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The Campbells' dream home passed four inspections in all and the couple began to renovate the house. That's when their trouble started.
Subsequent inspections turned up faulty electrical systems, plumbing problems and a determination the house was structurally unsound. It was condemned by Manitoba Hydro, which gave the Campbells a week to get out, CBC News said.
"He [the Hydro inspector] said, 'you can't live here anymore. It's not safe,' " Teresa Campbell said.
Contractors estimated it would cost $250,000 to bring the house back to code. For the Campbells, it might as well have been a million.
“We felt very, very helpless because we put everything into this house and everything into this dream,” said Teresa.
The Campbells, their three children and a foster child, are now living in a trailer on the property.
“You feel mad half the time because your house is 20 feet away; the thing that you wanted is 20 feet away,” Patrick Campbell said.
The house is unsellable as it sits and the Campbells have lost all their equity in the property. A real estate lawyer told the couple "there's no one to go after," Patrick told CBC News.
Structural engineer Phil Dorn said his company, Samson Engineering is often called in to make corrections on such homes. It's not unusual for homeowners to be blindsided the way the Campbells were, he told CBC News.
Relying on pre-purchase report from a home inspector is no guarantee a house has no problems, Dorn said.
“If [work is] not done properly in terms of mechanical or electrical — it’s hidden behind walls, so it’s really hard to pick up,” Dorn explained. “Legally the courts have dictated that it’s buyer beware."
The courts have in rare instances given recourse to buyers if they can prove a home inspection was not done properly.
In 2009, inspector Imre Toth of Aldergrove, B.C., was ordered to pay $192,000 to a couple who bought a $1.1-million home on the strength of his estimate that it would need about $20,000 in repairs. The actual cost ended up being $212,000, CBC News reported at the time.
The B.C. government introduced new regulations governing home inspections in 2009 but CBC News reported earlier this year that it's still almost impossible for homebuyers to get compensation for a faulty inspection.
Vancouver resident Lindsay Denton is suing home inspector Christopher Stockdale after he signed off on a $750,000 home she was buying. In her claim, she said the house turned out to be structurally unsound, with serious water damage, a hole in the roof and asbestos in the air ducts.
When Denton pointed out the problems, Stockdale offered to refund her $565 inspection fee, she claims in her suit.
Stockdale has denied any negligence and in his response to the suit said the inspection and his subsequent report “do not constitute a guarantee, warranty or insurance policy.”
Denton discovered a complaint to Canadian Association of Home and Property Inspectors' B.C. branch (which Stockdale once headed) might cost a negligent inspector a brief licence suspension. The courts are still the only place to get a financial settlement, CBC News said.
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The association is watching the Denton case closely, said executive director Helene Barton, but noted inspectors are rarely found guilty of wrongdoing.
Home inspections are essentially a visual once-over, Barton explained. It includes checking roofs and house structure for flaws, and ensuring furnaces and appliances work. If the inspector misses something, homeowners can file a complaint with her association.
“We have an excellent professional complaint review system, process, however like any other association we have no authority to offer damages,” she told CBC News. “Unfortunately the courts are the only ones that can do that.”
The Imre ruling was a rare case of a successful suit. A lawyer who specializes in construction-law cases told CBC News he advises taking inspectors to small-claims court, where awards are capped at $25,000.
Popular home-reno TV star Mike Holmes is a staunch advocate of regulating the home-inspection business. In a 2008 National Post column, he noted Ontario was joining B.C. and Alberta in requiring inspectors to be licensed.
"I’ve been saying it for years. The home inspection industry is like the Wild West — a lot of cowboys, not a lot of sheriffs," said Holmes.