Dear Director Henshaw,

As you are aware, Senator Scott Surovell (D-Fairfax) introduced Senate Bill 627 in the 2018 session that would prohibit home inspectors from limiting their liability in home inspection contracts. This stems from an experience whereby a homebuyer ordered a termite inspection as an additional service, from a drop-down menu offering, while also ordering a full home inspection.  Significant termite damage was discovered once the homebuyer took possession of the property. In reviewing the termite inspection contract, it was discovered that the inspection company had limited liability, and the homebuyer would only be able to recover the cost of the inspection. As I understand it, this issue was handled through the Home Inspector Licensing Board and regulatory body through DPOR.

However, since the bill has been presented, I would like to bring several items to your attention that I realize you are already aware of:

1.  Home inspections include a written evaluation of the readily accessible components of a residential building such as heating, cooling, plumbing, and electrical systems; structural components; foundation; roof; and masonry. Termite inspections are not part of a home inspection, and are often separate inspections required by lenders.

2.  All home inspectors in Virginia are required to be licensed. As a condition of State licensure, home inspectors are required to carry $250,000 of liability insurance. If this bill were to be enacted, insurers would likely either drop home inspectors from coverage because of the limits of liability being removed, or the rates would skyrocket, and/or the insurers could potentially require home inspectors to carry costly errors and omissions coverage, with that cost being passed on to the homebuyer. If insurers were to drop home inspectors, they would be unable to meet the state requirements for licensure.

3.  Passing this law could not only create an environment that increases the costs of home inspections, but reduces the number of home inspectors available in some given areas of the state, thereby creating a situation that might cause the homeowner to NOT hire a home inspector. It is our understanding that the goal of the state regulations are to protect the public health, safety and welfare of the residents of the Commonwealth. Failure to inspect a home, especially a vacant property, using the professional services of a licensed home inspector, could result in not only a negative financial impact to the homebuyer, but safety as well, as in the area of fire, carbon monoxide poisoning and other life threatening events.

4.  Limited liability is a necessary protection. Home inspectors test and assess a number of components within a home, most of which have a limited life span. An HVAC unit that functions properly in the spring can suddenly experience problems shortly thereafter during hot summer months when its load is increased.

5.  As part of the licensure requirement that was enacted in 2016, consumers can file complaints with the Board of Asbestos, Lead and Home Inspectors. If a home inspector was found to be negligent by the Board, they can have their license suspended or revoked.

I am opposed to SB627 and request that you enter into the formal record my opposition to this bill.