Home sellers hid foundation cracks with storage containers, buyers' lawsuit alleges

The buyers of a house in Winnipeg have filed a lawsuit claiming the house sellers deliberately hid information about its cracked foundation, and that a home inspector did not inform them about the problem after doing an inspection.

After taking possession of the house in the summer of 2023, the buyers discovered serious cracks in the foundation, according to a statement of claim filed May 1 in Court of King's Bench at Winnipeg.

The buyers claim the prior owners "had deliberately and strategically placed storage containers and a recycling container to hide three severe cracks at the foundation adjacent to the garage," the lawsuit says.

The homebuyers claim the intent was "to hide the latent defects from view," the court document says.

It alleges the prior owners had issued a property disclosure statement falsely stating they were unaware of the cracks in the foundation of the Linden Woods home, which has an assessed value of more than $500,000.

Once the buyers had possession of the home, they got a structural engineer to inspect the three cracks in the foundation.

Based on the engineer's report, the lawsuit claims a foundation repair contractor estimated the cost to fix the foundation would be between $40,000 and $50,000.

The buyers had made a conditional offer to purchase the house and before finalizing the offer, they had a home inspection done by an inspector registered and certified by the Canadian Association of Home and Property Inspectors, a self-regulated professional body of home inspectors.

The plaintiffs are seeking damages from the home inspector for professional negligence, alleging he failed to exercise the diligence expected of a registered home inspector.

After discovering the alleged defects with the house, the lawsuit says the plaintiffs contacted their real estate company and the home inspector.

The home inspector later told the plaintiffs "that he was blameless," as the cracks "were hidden from view by the storage containers and recycling bin strategically placed in front of the defects," the lawsuit says. 

The court document claims the storage and recycling containers in the basement could easily have been moved by the home inspector, but he did not.

As a result, the inspector failed to note the cracks in the foundation and warn the plaintiffs about them, the claim says.

It says that if the plaintiffs had been advised of the cracks, they wouldn't have finalized their offer to purchase the house.