Owners of several mobile homes in a trailer park turned into a flaming inferno following the crash of a hot-air balloon are suing the balloon's owner and its pilot.

Two women were killed and 11 others injured when a fire broke out on the balloon in August 2007 and it crashed into the trailer park in Surrey, B.C.

The B.C. Supreme Court lawsuit launched by five mobile home owners blames SRP Adventure Tours, pilot Stephen Pennock and the Attorney General of Canada.

The lawsuit claims the pilot wasn't properly trained, modifications had been made to the balloon which weren't approved by the manufacturer and proper government inspection had not been conducted.

The burning balloon and basket crashed down on the homes of Paul Pecton, Arlene and Dean Mullin, Roland Belanger, Bruce Allen and Justin Wyler.

Most of the homes were completely destroyed.

"The accident occurred as a result of the fault, negligence and/or breach of duty of care," the lawsuit states.

A Transportation Safety Board report issued in September found the balloon had numerous safety issues, including a modification to accept a fourth propane tank.

The report said the issue might have been uncovered by Transport Canada but there was no requirement for inspections.

That issue is also singled out in the lawsuit, alleging negligence by Transport Canada for issuing a special flight operating certificate to Pennock without conducting such an inspection.

Shannon Knackstedt, 49, and her 21-year-old daughter Gemma died in the crash.

The TSB report found hot-air balloon operators had very limited regulation and recommended Transport Canada boost its oversight over commercial balloon operators similar to those of fixed-wing aircraft and helicopters.

After the report was released Pennock said the crash had a deep impact on him and that he regretted the terrible incident.

He said the balloon was being operated within the standard practices of the industry at the time.

None of the parties named in the lawsuit have yet filed a statement of defence.

With files from The Canadian Press