Cracked foundation sparks lawsuit against inspectors, home owners

A couple who bought a Linden Woods house are suing two home inspectors for allegedly failing to notice cracks in the foundation, and the former owners, who they claim concealed the defects.

The lawsuit, filed in the Manitoba Court of King’s Bench this month by Liyuan Liu and Xishun Xu, names Bruce and Sharron Davis, and inspectors, Tian “Frank” Gao and Daniel Engbrecht and their companies, as defendants.

The two men are registered home inspectors with the Canadian Association of Home & Property Inspectors and sometimes operate jointly, the court papers say.

The plaintiffs accuse Gao and Engbrecht of failing to exercise the care expected from a registered and designated home inspector.

The plaintiffs are seeking unspecified damages for negligence, breach of contract, misrepresentation and deliberate concealment of defects by the former owners, as well as damages for professional negligence from the home inspection firm.

They want $40,000 to $50,000 for foundation repairs and court costs.

The defendants haven’t responded with statements of defence and the allegations haven’t been heard in court.

The plaintiffs allege they went to the listed home on Westchester Drive in May 2023 and “exercised reasonable due diligence,” but claim the homeowners “deliberately and strategically placed storage containers and a recycling container to hide three severe cracks at the foundation adjacent to the garage.”

The plaintiffs charge that the containers were placed to mislead prospective purchasers from being aware of problems with the condition of the home, alleging it constitutes deliberate misrepresentation.

The plaintiffs claim the homeowners “falsely” stated they were unaware of the cracks in a property disclosure statement on May 9, 2023.

The purchasers put in a conditional offer nine days later and retained Gao to conduct an inspection. They allege he was working for or with Engbrecht at the time, making Engbrecht jointly liable for Gao’s alleged negligence.

Gao inspected the home on May 29, 2023, the court papers allege, but did not see the cracks or move the containers placed in front of them.

The purchasers bought the home on May 30, which they say they would not have done if they were aware of the foundation cracks.

They allege they discovered the cracks in August 2023 and alerted their agent and Gao, who told them in June 2024 he was “blameless as the latent defects were hidden from view.”

The purchasers had a structural engineer evaluate the cracks and write a report, which a contractor used in November 2023 to estimate repairs would cost from $40,000 to $50,000.

Peter Weeks, the president of the Canadian Association of Home & Property Inspectors, said the industry is not regulated in Manitoba, as it is in British Columbia and Alberta. He said that poses a risk to consumers because a person can be an inspector without being accredited or trained.

“Anybody can be a home inspector, tomorrow,” he said, adding the association would like to see the industry regulated and licensed in Manitoba and elsewhere in the country.

Generally speaking, Weeks said home inspectors conduct their work visually and don’t typically move any objects.

“It’s based on what is visible to us at the time of the inspection,” said Weeks.

He said contracts typically say the inspection involves areas that are readily visible and accessible.

Weeks said he has seen firewood stacked against a foundation, which he did not move.

“Another scenario would be, in the winter time, the roof is completely covered in snow. We’re not shovelling it to do an inspection,” he said.

“It’s something that we would write up as, at the time of the inspection, we were not able to take a look at the shingles or the roof because it was covered with snow.”

erik.pindera@freepress.mb.ca