I Wouldn’t Trust That if I Were You: Sellers’ Disclosures & Home Inspection Reports
This article is written in response to the increasing number of clients we see injured by sellers, real estate agents, and home inspectors failing to disclose material defects in real property existing at the time of sale.
The Home InspectionA home inspection consists of a visual examination of the mechanical, electrical or plumbing systems or the structural and essential components of a residential dwelling. The purpose of paying for a home inspection and receiving a report of the inspection is to identify material defects in the property. A material defect is a problem with property that would have a significant and adverse impact on the value of the property or that creates an unreasonable risk to people on the property. The useful life of structural elements, systems or subsystems expiring or being close to expiring is not a material defect.
Shielded from Liability
Buyers often feel comfortable purchasing property after receiving a seller's disclosure as well as a home inspection report. This is especially so when both the disclosure and the report fail to identify material defects. Sellers are required to disclose known material defects to buyers. However, sellers may be shielded from liability when the error, inaccuracy or omission is based on information provided by a home inspector. Likewise, a seller's real estate agent is not liable unless the real estate agent had actual knowledge of the material defect which was not disclosed to the buyer.
Buyers - Protect Yourselves
Buyers should remember that sellers, real estate agents, and home inspectors depend on each other in order to get money out of the buyer's pocket and into their own. Sellers, real estate agents, and home inspectors only make money if people are purchasing property. Buyers must take measures to protect themselves from being taken advantage of.
Protect YourselfAsk Questions & Take Notes
One way buyers can protect themselves is by asking questions and taking thorough notes, thereby keeping track of dates and statements of parties involved. We have seen some real estate agents use the same home inspector continuously. This can make it appealing for the home inspector to overlook defects in order to avoid jeopardizing the sale, thereby ensuring continual referrals from the happy real estate agent. Buyers should take advantage of communicating via email to preserve responses to their questions in writing. Buyers must be their own advocates. This means that buyers must be proactive. Home inspectors have a brief, one year statute of limitations period wherein they remain liable for failing to disclose material defects. The actual wording of the statute states that an action to recover damages arising from a home inspection report must be commenced within one year after the date the report is delivered.
Found a Material Defect after Purchase? Seek Counsel.
Please seek legal counsel immediately if you or someone you know has purchased a home and suspects that a material defect which was known or should have been known or discovered was not disclosed by a Seller's Disclosure or Home Inspection Report, even if more than one year has lapsed from the time the Home Inspection Report has been delivered to the buyer. This is so because our office has been successful against home inspectors failing to report a material defect where more than one year elapsed from the time the Home Inspection Report was delivered to the buyer.