A missed Major Defect in a building inspection report can lead to a lot of trouble down the line. In this case study, homeowners took a building inspector to court after their leaking shower caused $140,000 in water damages to their home. Their argument? The inspector should have noted a Major Defect.
Below, we look at the inspector’s original report and why the homeowners are arguing the case in court. We also look at how you can avoid similar stressful and costly legal battles like this by telling a clear Risk Story in your report. This means not just reporting what you can see on the day, but explaining what might happen if something goes wrong later.
The leaking shower
An inspector conducted a standard pre-purchase inspection on a home. In the bathroom, previous renovations had taken place in the shower. As part of his process, he ran the showers to check for leaks and documented that none were seen at the time of inspection.
He also explained that it was a visual inspection and that there were limits to what he could check. But four years later, problems arose.
A serious leak had developed in the subfloor due to a failed shower membrane. Water from the shower had soaked the hallway and bedroom carpets. The damage bill? $140,000. The matter is now in litigation, and the homeowner’s lawyer is alleging the inspector failed in his duty of care.
From the inspector’s point of view, this is a classic benefit-of-hindsight case. The shower wasn’t leaking during the inspection. The membrane was hidden behind tiles and walls—beyond the scope of a standard visual inspection. So why the claim?
Missing a Major Defect in a building inspection report
The inspector did what most would do:
- He ran the showers and found no leaks at the time.
- He noted that this was a visual inspection and that testing was limited.
- He made no mention of the recent bathroom renovations or possible signs of previous repairs.
However, the claim centres on whether the inspector should have reported the bathroom as having a Major Defect because of the risk that the leak was concealed, or a leak could occur.
Had the inspector considered telling a RISK story here, the homeowner’s lawyer would have had a much more difficult task bringing allegations against the inspector for failure in his duty of care.
Had the inspector told the Risk Story differently, his report might have said something like:
“Recent bathroom renovations noted—quality of work cannot be confirmed.
Signs of earlier repairs (blocking) to flooring visible, suggesting previous water damage.
No leaks found during testing, but evidence suggests there’s a risk of concealed or future leaks from the shower area.
Recommend further investigation by a licensed plumber/waterproofer and quarterly monitoring.
Classified as a Major Defect due to the risk of future structural damage.”
By calling it a Major Defect based on potential risk, not just what he could see, the inspector would have shown he met his duty of care. He’d also have made it harder for the homeowner’s lawyer to argue negligence.
Reporting risk matters more than ever when it comes to a Major Defect
Clear reporting of risks shows you took reasonable steps to warn your client. If a claim is made years later, you’ll have a strong defence.
Homeowners don’t just want to know what’s wrong on the day—they want to know what might happen down the track. This helps them budget for repairs, plan maintenance, or get further expert advice.
By being thorough about potential risks, it improves the reputation of pre-purchase inspections overall, clients get better value, and you avoid legal battles.
The landscape has changed – so should your reporting
In the last five years, the inspection industry has faced new pressures:
- Real estate agents often want clean reports to help them close deals, which can create pressure to “soften” the findings.
- Third-party platforms mean inspectors may never meet their actual client—until there’s a complaint or legal action.
- Homeowners are more aware of their consumer rights and are quicker to take legal action when things go wrong.
- Insurance companies are pushing back on claims for storm and water damage, encouraging homeowners to revisit old inspection reports in search of someone else to blame.
This is why clear, risk-based reporting matters. Especially when it comes to building inspection Major Defect cases.
You may not be able to stop things from going wrong years later, but you can protect yourself—and help your client make better decisions—by clearly telling the Risk Story in your report.
Rapid Solutions is on a mission to educate our members on how they can make small improvements to their reporting to avoid stressful incidents like the above. Here are more real cases and resources to learn from:
- Keeping Records: How To Do It Efficiently and Why It Matters
- Bodily Injury: This Case Study Teaches Very Important Lessons
- Insurance Case Study: Claims Against Termite Pest Control Businesses
- 3 Steps to Take with Pre-Purchase Pest and Building Inspections
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