The Ontario Court of Appeal’s recent decision in Breen v. Lake of Bays (Township)[1], is a cautionary warning to municipalities that issued building permits and closed files without conducting final inspections on buildings. The Court of Appeal upheld the trial judge’s decision finding liability against the Lake of Bays Township (the “municipality”) for failing to review construction plans before issuing a building permit to the builder of a cottage in 1989, purchased by the plaintiffs, Elizabeth and John Breen (the “Breens”), ten years later, and for failing to conduct a final inspection to ensure compliance with the Building Code Act[2] (the “Act”) and its corresponding regulation, the Building Code[3] (the “Code”). The Court of Appeal upheld judgment to the plaintiffs in the amount of $361,875.
This is a significant decision exposing municipalities to potential lawsuits by purchasers far removed from the initial construction of a building. Building departments may be well-advised to dust off their historical files, particularly where building permits were issued prior to 2012, and assess if final inspections were conducted by their inspectors. This laborious task may seem daunting, but a worthwhile risk-mitigation exercise in fending off lawsuits.
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