The former owners of the rowhouse at 73 Long's Hill in St. John's are threatening legal action for what they say is negligence on the city's behalf.
Michael Birklein and Mieka West recently sold the house for land value of $74,500 after structural problems were discovered last year.
But the couple wants the city to pay damages.
"If that building had collapsed, we would have been held criminally responsible,” Birklein told CBC News.
“We had many sleepless nights, going is this building going to collapse and kill someone?"
The home at 73 Long's Hill was the subject of a CBC News investigation last month, after the new owner listed an apartment there for rent, without the required city occupancy permits.
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Birklein and West say the city knew about the structural problems long before they did.
After digging through city records, Birklein says he found orders for structural repair work going back decades, but no records of the work being completed.
"So we feel that the city has really dropped the ball and we're the people carrying it."
Birklein and West are seeking up to $250,000.
The city says it won't comment on anticipated litigation, but did confirm that occupancy permits have yet to be issued for the property.
City officials say they sent the owner a list of deficiencies and requirements, and met with him twice.
The city is now reviewing information from the owner's engineer, a process that is expected to take a week.
While some remedial work has been completed, the city says no occupancy permit will be issued until it has approved all of the work.