​Home Inspector’s Liability: Read the Fine Print. Then Read the Law.

By Ryan Westerman

Recently, the Hunnell Law Group has received an influx of cases seeking to sue their home inspector for making one or more major mistakes or omissions during the home inspection phase, costing the property owner several thousands of dollars in necessary repairs post-closing. In a few instances, the mistakes were glaring. I was shocked a licensed inspector could miss items that are so open and obvious. 

My first words of advice to these parties are review the Home Inspection Agreement. This is the document that outlines the terms and conditions of the home inspection which both parties sign. More often than not, there is a low ceiling on what can be recovered. It is not uncommon to limit the damages to just the return of the inspection fee, typically between $400.00 - $600.00.

Recently, I saw a liability limit that appeared more reasonable on its face. There was a catch of course. Isn’t there always? 

       "[LIABILITY] will not be more than the lesser of actual damages or ten times (10x) the inspection fee. Client waives any claim for consequential, exemplary, special, or incidental damages or for the loss of the use of the property."

It doesn’t take much imagination to create the scenario where the actual damages are significantly more than 10x’s the inspection fee. If the inspection overlooked an enormous structural issue that will cost $20,000.00+ to repair, and the inspection cost $500.00, then the aggrieved party is getting $5,000.00, without the ability to sue for other damages.

The Home Inspection Advisory Committee (N.J.A.C. 13:40-15) does hold inspectors to a certain level of professional performance. N.J.A.C. 13:40-15.20 (“SUSPENSION, REVOCATION, OR REFUSAL TO RENEW LICENSE”) outlines instances where the Committee “may deny, refuse to renew, or temporarily suspend or revoke a license, or issue a civil penalty[.]” An inspector that has engaged in “repeated acts of negligence, malpractice or incompetence” qualifies for punishment from the committee up to and including losing their license. 

So, while you may not be made whole financially, you can report the inspector to the committee, in the hopes of preventing another individual from a financial windfall or purchasing a house without a sound structural foundation.