How Real Estate Agents Can Limit Their Liability With Home Inspections

Increasingly, lawsuits are the preferred method of resolving even minor conflicts for some people.  This makes it no surprise that real estate agents can find themselves named as defendants in lawsuits.

Most of these lawsuits include multiple defendants:  the seller, the seller’s agent, the agent’s broker, the buyer’s agent, that agent’s broker, the home inspector, pest inspector, the appraiser … the list can go on and on and can include multiple counts in each lawsuit.

Just like the best defense is a good offense, the best strategy is to avoid being named in a lawsuit in the first place. There are strategies that can reduce or eliminate your exposure.

Residential real estate lawsuits almost always stem from a buyer feeling like they got less than they should have.  Often, after moving in, they realize perhaps the house is not all they expected it to be.  Sometimes, there are alleged defects, and sometimes these are not discovered by a home inspector during the home inspection.

This does not mean the home inspector did not do their job, or that the real estate agent was negligent for recommending a certain inspector.  There can be a number of reasons that a defect is not found during a home inspection.  For example, home inspectors do not determine the adequacy of any structural system or component; this is beyond the scope of a home inspection.

Or it could be something not reported because it was located in an area that was inaccessible to the home inspector, such as a room that was locked.  Sometimes, known defects are intentionally concealed by sellers.  Other times, the defect was in fact found by the home inspector and noted in the home inspection report, but was not acted upon by the buyers.

Your professional home inspector can often be your first line of defense against these types of claims.

In next week’s article, we will share a list of the Top 10 Ways you can limit your professional liability exposure.
Note:  we are not attorneys, and we always recommend you consult a licensed attorney regarding any legal matters.

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