A home inspection is performed by a professional home inspector. They are usually done as part of a residential property purchase.
Home inspections are intended to detect and identify defects or repairs that need to be addressed prior to selling the home. A home inspection is usually required by a local municipal board in order to ensure that the home meets local safety and zoning standards. They are also often requested by individuals who want to purchase or sell a home.
The majority of mortgage lenders require that an individual purchasing a home obtain a professional home inspection before the lender will provide financing to purchase the property. If the home does not pass the inspection or if the home inspection report shows major property issues, the lender will likely refuse to provide the buyer with financing.
A home inspection may also be used to:
- Assess a home value after an accident that causes damage to the home, such as an earthquake or flood;
- Assess a home value for refinancing or sale;
- Determine whether or not the home was originally constructed according to code; or
- Assess the property value for property tax purposes.
A home inspection may also include notes regarding possible additions or improvements that may increase the property value.
A home inspection typically focuses on:
- Structural aspects of the structure;
- Safety aspects of the structure;
- The roof, windows, and doors;
- The condition and function of appliances;
- The condition and function of heating and ventilation systems; or
- Carpeting and flooring.
As noted above, a home inspection is usually required for any home sale transaction or when the title of the home is being transferred to a new owner. An inspection may also be requested if the owner wishes to obtain a home repair loan or wants to renovate the property.
An example of this may be if a homeowner would like to install a patio. Prior to installing the patio, the homeowners would be required to obtain a home inspection in order to determine whether the new structure is allowed by housing laws and would meet safety standards.
What are Some Examples of Home Inspection Fraud?
The laws regarding home inspector liability laws vary from state to state. A home inspector may be held liable for broken or breached contract provisions or for failing to detect a defect.
Home inspection fraud occurs when an inspector makes a false report. A fraudulent report may state that a specific repair must be made when the repair is unnecessary. This type of fraud occurs most often when an inspector advertises their own repair services along with their inspection services.
Because of this, it is advisable to be wary of inspectors who offer repair services in a package with their inspection services. In order to avoid this type of fraud, a number of states do not permit inspectors to make repairs on a home until a waiting period has passed, which is generally one year past the inspection.
Another type of home inspection fraud may occur during the sale and purchase of a home. In these cases, the home inspector may conspire with the purchaser to create a false report. The false report may state that the seller is required to make certain unnecessary repairs or installations prior to the buyer purchasing the home. In these cases, the buyer receives free repairs or installations and the inspector is paid for their extra work.
In some cases, the inspector conspires with the seller in order to force the buyer to pay for false repairs. This type of home inspection fraud is dangerous because these reports are not always communicated between the buyer and seller and the parties may fail to verify that the home inspection report is true and accurate.
How Can Home Inspection Fraud Be Prevented?
Home inspection fraud can be prevented in a number of ways. The best method of preventing a home inspection fraud dispute is to prevent it in the first place. Home inspection fraud may be prevented by having repairs completed by an individual other than the home inspector.
It is important to check that the inspector has a valid license and no previous history of fraud. An individual can also hire their own inspector and compare the results of the inspections.
It is important to be aware of any figures or claims that seem suspicious and get a second opinion if possible. An individual should always request a copy of the inspection report in order to verify that it is not fraudulent.
Another possible safeguard may be to present home inspection requests in the form of a bid. An individual may inform potential inspectors that they are considering hiring other inspectors. This may prevent fraud as an inspector would be afraid they may be caught if their report is compared to another.
What Can I Do If I See False Information in the Home Inspection Report?
Yes, an individual can sue a home inspector for false information. If the home inspector works independently, they may be sued directly. If they are employed by a company, the company may be sued. The legal action taken will usually be based on the contract between the client and the inspector.
If the home inspector is hired by a municipality, city, or government, an individual will likely need to file a complaint with the relevant agency. Typically, that agency will conduct an investigation of the issue prior to a lawsuit being filed.
If an individual, either the buyer or the seller, disputes an aspect of the report, they can sue the home inspector for fraud. If the inspector’s report has caused an individual to lose ownership of their home, or other significant financial damages, they may be able to obtain:
- An injunction that will prevent the sale;
- Compensatory damages, or economic damages that are equivalent to the amount lost due to the inspector’s fraud; or
- Punitive damages, which are used in extreme cases, and may include the inspector losing their certification or their job as an inspector.
It is important to note that a home inspector may not find or be aware of every fault or defect in a home. Certain defects are undetectable and will develop over time.
However, if the home inspector was negligent during the inspection, they may be liable for losses or injuries that resulted from their conduct. For example, if the homeowner is injured when a deck collapses that was obviously not structurally sound, and the inspector should have found the issue during inspection, the inspector may be liable for the homeowner’s injuries. In these cases, legal remedies typically include a damages award to reimburse the injured party for losses resulting from the faulty inspection.
Do I Need an Attorney for Home Inspection Fraud?
Yes, it is essential to have an experienced real estate lawyer help you with any home inspection fraud issues. An attorney can review your case and inform you of your options as well as any specific laws in your state.
An attorney can also represent you in court, if necessary. If you are in the process of purchasing or selling a home, an attorney can assist you in negotiating the inspection contract and review all transactions related to the purchase. An inspector is less likely to commit fraud if they know an attorney will be reviewing their work.