When viewing a property, it is difficult to see many of the underlying problems that often surface further down the line, so most buyers use the services of home inspectors who can spot problems ahead of time. People who choose not to use an inspector often run into problems once they move in and discover issues with plumbing, damp, mold or other serious defects that probably would have dissuaded them from buying the home to begin with. People who find themselves in this situation normally seek legal advice to determine the recourse of a buyer to a seller. After the sale of a home, different states handle claims of seller deception differently. In Delaware, the buyer can sue the seller for defects if five points can be proven:
1)The seller or realtor made a misrepresentation.
2)It was false.
3)The seller knew it was false.
4)The seller made the claim in order to persuade the buyer to purchase the home.
5)The buyer bought the home in part because they believed the false statement.
Delaware law enables the courts to return the home to the seller in exchange for a full refund or to compel the seller to pay damages to the buyer that are sufficient to cover the necessary work on the home. Generally, buyers must file lawsuits against sellers within two years of the purchase because of the statute of limitations. Increasingly, buyers employ real estate attorneys during home purchases, and the attorneys can give state specific advice on recourse against sellers if defects emerge after the closing.
Every state regulates home inspectors differently, but buyers use the services of these professionals to determine the state of a home before buying it. Generally, when underlying problems emerge, most people think in terms of recourse of a buyer to a seller. After a sale of a home, sellers who paid for a sellers inspection are usually not liable for problems that the buyer later detects. The liability falls onto the home inspectors, and many states require inspectors to have insurance to cover the cost of legal claims.
In Kentucky, inspectors must carry liability insurance of $250,000. New Jersey requires them to perform 250 inspections as an associate before becoming a certified inspector and to purchase liability policies of at least $500,000. State regulations are intended to make sure inspectors do not face serious legal challenges because the required training and certification should ensure good quality inspections but the high dollar amounts of insurance recognize the costs involved in major home repairs.
In 2010, Florida introduced new requirements for home inspectors, but critics argue that the certification, which consists of 120 hours of in class training and no actual inspecting, is insufficient and will lead to bad inspections and lawsuits. For home buyers in Florida, the good news is the state has also introduced a new rule requiring inspectors to carry $300,000 of liability. Unlike sellers, home inspectors do not have to be accused of fraud to be sued but can be taken to court for serious oversights and errors.
Delaware Business Law: https://www.delawarebusinesslawyerblog.com/2010/07/delaware_real_estate_attorney_1.html
American Society of Home Inspectors https://www.ashi.org/customers/state.asp
Angieslist Florida Home Inspectors https://magazine.angieslist.com/articles/2010/july/south/florida/tampa_bay/florida-home-inspectors-lambast-licensing-law.aspx