Home inspectors are human too. They have bad days. They can miss things while conducting inspections. That being said, sometimes, they don’t miss, but they are accused or assumed to have missed a defect. Frequently, these events lead to a discussion of the inspector’s liability. Unfortunately, these discussions are not a simple as some participants believe. This article is an effort to clear their a little on inspector liability and will hopefully help prevent misunderstandings.
Setting realistic expectations is critical to the discussion of inspector liability. Clients that have an understanding of a home inspection that is in line with the industry’s definitions and standards rarely decide to go after an inspector. Expectations should be based on a clear understanding of what an inspection is, what it is not, what the client’s responsibility is, as well as industry and (where applicable) state licensing standards.
First let’s define what a home inspection is. As an example, the State of Texas defines a home inspection as “a non‐technically exhaustive, limited visual survey and basic performance evaluation of the systems and components of a building using normal controls and does not require the use of specialized equipment or procedures.” Most national and state associations have very similar definitions.
This means that a home inspection can not find everything that is wrong with a home. To find everything (to be “technically exhaustive”) an inspection would require the disassembly and inspection of every mechanical device, damaging walls, floors and ceilings and an expert level of knowledge in every structure and system of a home. This level of inspection would be cost prohibitive and would probably be refused by every seller. Any honest evaluation of inspections supports the idea that an inspection is the opinion of the inspector of the condition of a home based on operating systems in their normal modes and a visual inspection of the evidence available at the time. An inspection can not find latent (not visibly present now) defects or tell you when a system or component is going to fail. No inspector can guarantee that conditions will not change in the time between his inspection and closing, much less in the next year. An inspection is not technically exhaustive, because there’s no realistic way it can be.
One of the least understood facts about inspectors is that they are not experts in all components of a home. Think of it like this – What would it cost to hire one individual who was a certified structural engineer, master plumber, master electrician, master HVAC technician and certified builder? Does this person even exist? For this reason, the free market system developed the profession of “Home Inspector”. A home inspector is well educated in all of the systems and components of a house, but is not an expert in most (if any) of those areas. Therefore, a home inspector likely will not find everything wrong in an electric panel that an electrician will.
So why would you even bother to hire an inspector? The answer is really simple in that it would cost thousands of dollars to hire all of the experts needed to evaluate a home. This is why a home inspection is not technically exhaustive. A good home inspector can be really useful in leveling the playing field with the seller, but on a good day, an inspector is hard pressed to find 80% of what is wrong with a home.
Visible or Latent?
So having stipulated the accepted definition of an inspection, it logically follows that for an inspector liability to exist, for missing a problem, the issue must have been visually or operationally apparent at the time of the inspection. This is far less likely than many aggrieved home buyers believe. Frequently, the buyer believes that an inspector should have seen the issue because a so-called expert tells them that “the home inspector should have seen this”. This is usually wrong because the expert had to remove a panel to access the fault or it is an obscure, expert level minor issue. Couple this with the fact that most plumbers and electricians do not understand the license act or standards for an inspector. As a rule, any expert that follows an inspector through a home should find more than the inspector or he is not much of an expert.
It is interesting to note that as a precedent in law the advice of a personal service professional does not come with a guarantee. For example, no lawyer can predict or guarantee what a jury will do. No client would expect such a prediction or guarantee. How could an inspector guarantee the completeness of an inspection? Unfortunately, far to often, the same lawyer that can not guarantee the jury’s result will expect an inspector to guarantee that his inspection will still be valid a year later.
The Client’s Responsibilities
Read & heed. You would be amazed how often people pay good money for an inspection and then don’t read it. It is so bad, that my firm is now being threatened with litigation in a case where we told the buyer to consult a roofer, he did not and is now trying to sue us over his roof. We have all heard that you can lead a horse to water but you can’t make him drink, and its because its true. The client needs to read the entire report and seek clarification from the inspector if needed. The client must understand what the inspector found and what further action is recommended. Frequently, the inspector recommends further inspections which need to take place before the end of the option period. Remember, an inspector is a generalist and sometimes he will reach the extent of an inspector’s reasonable knowledge and recommend an expert.
A great example of this is AC systems. Much of the system is in a sealed cabinet and can not be accessed by any inspector. If a problem exists, the inspector will have to recommend an HVAC specialist. Siding can also be a bear, too. What product are you replacing? How many square feet is being installed? How high will the contractor be working? All of these factors affect cost and length of the project. Get professional quotes. When an inspector recommends that the client consults further experts, it should be done before the end of the negotiation period. Do not make assumptions. Bad assumptions can be very, very, very expensive. Additionally, make sure that you are continuing to consult reputable, trusted experts. We recommend the use of “A” rated providers from Angie’s List. In the end these experts and the inspector will help you get some idea of the issues and the costs of repairs. Without an understanding of these costs, how can you conclude negotiations? A $400,000 home is not really worth $400,000 if it needs $35,000 in repairs.
In the end, it is possible for an inspector to have liability, but it is far less common than assumed. Most inspectors are very careful because they understand the risks. My recommendation is that before your Uncle Biff or an “friendly” plumber convinces you that you have an inspector liability situation, talk to your inspector. Good inspectors are vey willing to discuss the realistic expectations and potential for an inspection and are eager to answer questions after the fact. Also be very careful of tradesman who stand to financially gain and are trying to convince you that it’s the inspector fault. Inspector liability is not that easy.
**As a note, since most licensing states and associations do not allow inspectors to conduct paid repairs on homes that they have inspected, the inspector can not quote repair costs. It is simply impossible for an inspector to quote someone else’s work. They can speak in general terms, but not specifically.**