In this paper, a new contact-free method for monitoring the displacement of buried foundations, with application to model (laboratory) studies, is considered. This method is based on the measurement of the magnetic induction amplitude created by a magnetic dipole attached to the construction. An array of sensing coils, loc- ated distantly, measures the changes in magnetic induction amplitude invoked by displacement of the signal source. The forward and inverse problems are formulated. Reconstruction of the source displacement is performed for synthetic data, both contaminated and uncontaminated by noise. It has been found that the reconstruction of displacements as small as 0.001 m is possible for distances between signal source (transmitting coil – magnetic dipole) and coil array of 0.5 m, even for data contaminated by noise.