My Home Inspector did a LOUSY job. So now what?

Your Client, a prospective Purchaser, obtains a Home Inspection before entering into a Contract to purchase Real Estate in New York. The Purchaser then closes, and then months later you receive the telephone call or the E-Mail, alerting you, his Attorney, that the Home Inspector did a lousy job, and there are a slew of things that are wrong with the house that the Home Inspector missed, and now what are you, his Attorney, going to do for him? Sound familiar?

New York, Title 19 NYCRR Section 197.4, et seq, requires that Home Inspectors provide customers with a written Contract that describes the cost of the Home Inspection as well as the scope of the Inspection, which further requires that they inspect at least those home systems and components that are listed in the Regulations. The Licensing Department allows for Home Inspectors to limit their liability in the Contract. They may do so by limiting the scope of the work to certain systems or components of the home or limiting potential damages to an amount specified in the Contract or to the cost of the Home Inspection.

In New York, Rector v. Calamus Group, Inc., 17 A.D.3d 960 (N.Y. App. Div., 2005) held that a Home Inspector may contractually limit his liability to the cost of the Home Inspection; Schietinger, et al. v. Tauscher Cronacher Professional Engineers, P.C., 40 A.D.3d 954 (N.Y. App. Div., 2007); Goldstein v. Carnell, 74 A.D.3d 745 (N.Y. App. Div., 2010); however, in Smith-Hoy v. AMC Prop. Evaluations, Inc., 52 A.D.3d 809 (2008), albeit only in dicta, the Court held that a Home Inspector cannot limit his liability for gross negligence. Note also that the limitation clause must recite the limitation, meaning that if it is limited to the cost of the Inspection, it must clearly recite that. In O'csay v. Yolo Equities Corp., 2009 N.Y. Misc LEXIS 5748, the Court held that if a Home Inspector intends to limit his liability to the cost of the Home Inspection, the Inspection Contract must clearly recite, in simplistic terms, its limiting language.

By contrast, in New Jersey, for example, the Court in Lucier v. Williams, 366 N.J. Super. 485, 841 A.2d 907 (2004) held that a clause that limits the Home Inspector’s liability to the sum certain amount of $500.00 for the Home Inspection is void as being both unconscionable as declaring a limitation of liability provision in the Contract as being both unconscionable as well as violative of public policy.

And what is the point to all of this? As an Attorney, one normally enters the picture in New York, at just about the same time that the Purchaser is looking to obtain a Home Inspection.?As such, it may be incumbent upon the Attorney to caution the Purchaser, in writing, to retain a Home Inspector whose Home Inspection Contract does not contain such a limitation clause, at the risk of the Attorney bearing the brunt of a bad inspection, coupled by that telephone call or E-Mail from the Purchaser asserting “why didn’t you warn me????”?