If You’re Going to Build, Do it Right: Subsequent Owners’ Right to Sue a Builder and/or Former Owners
Building your own home can be a challenging, but rewarding experience. Many property owners will choose to oversee or complete the construction of their home or major components of it and plan to live in their home for the rest of their lives. One of the risks of overseeing or completing construction of a home is that, upon its sale, a home owner will remain exposed to liability for subsequent purchasers and occupants of the home.
In Nieman v. Kroeker, 2017 BCSC 368 (CanLII), the defendant and then-property owner acted as his own general contractor in the construction of his house in 2004. In 2005, after the final inspection had been completed, the defendant did extensive landscaping work which involved building two terraced retaining walls, building a large patio, installing a barbeque, installing a fireplace, installing a hot tub, installing a second patio and placing stone cladding on the front of the house. The defendant had no formal training in the field of construction, but had previously acted as his own general contractor in the construction of another house in the 1980’s.
Since the defendant planned on living at the property, he sought and was granted an exemption from the requirement of the Homeowner Protection Act to obtain insurance.
After the plaintiffs purchased the home in 2008, a number of the landscaping features began to fail and did so in a manner that risked harm to the plaintiffs and occupants of their home.
Outside certain limited contexts, ordinarily there needs to be a contractual relationship or a relationship of proximity based on foreseeability between a victim and a wrongdoer for the victim to recover. However, in Nieman, the plaintiffs avoided issues with the need for such a relationship, the limited protection provided by property disclosure statements and Limitation Act concerns by basing their claim on the legal principals detailed in Winnipeg Condominium Corporation No. 36 v. Bird Construction, 1995 CanLII 146 (SCC) 1 S.C.R. 85.
Put simply, Winnipeg Condominium stands for the principal that a contractor or other person responsible for the design and construction of a building may be held liable in tort to pay for the cost to remedy latent defects in such a building and where such defects create a real and substantial danger to inhabitants of a building. The rights detailed in Winnipeg Condominium are available regardless of there being a contractual relationship between the constructing party and the claiming party (although, in the case of Nieman, there was a contractual relationship) and arise when an issue is discovered rather than when the negligent construction occurs. In theory, a property could pass to several owners and a party discovering a dangerous and hidden defect could still claim against the original party who constructed or designed the property.
In Nieman, the court found that the defendant’s lack of professional experience and intention to utilize the property for his own use did not change the standard of care applicable to any party constructing a property. The former defendant remained liable to the plaintiffs for defects which occasioned or could occasion danger. The court also found that the result of the defendant’s negligent construction was easily foreseeable; that is, he ought to have known that the manner in which he constructed the property could occasion harm or would be dangerous.
The court awarded the plaintiffs the amounts required to replace the faulty and dangerous features installed by the defendant less some subtractions for some amounts spent improving rather than replacing defective features and as a result of certain elements of the work done by the defendant having not immediately failed.
Nieman highlights that, even where the plan is for owners to live and die in the home they are constructing, it remains incumbent on owners constructing their own home to ensure that their property is constructed properly, in a safe fashion and in line with all applicable building standards. By failing to construct features in accordance with prevailing industry standards and in a way that avoids any foreseeable risk of harm to future owners and occupants, an owner-builder exposes themselves to potential litigation from future owners and occupants for years to come.