VA Senate Bill 627 Opposition Statement:

We writing to express our company’s strong opposition to VA Senate Bill 627, which intends to prohibit home inspectors from any contractual limits on their liability.  While our company, HouseMaster, an international home inspection franchise with licensed franchisees in Virginia, generally supports legislation that benefits the interest of consumers and helps ensure the availability of qualified and competent home inspectors.  However, such legislation must be reasonable and not create a situation adverse to business survival or growth.

 

Unfortunately, the approach taken in the crafting of SB 627, that if passed into law, would prohibit home inspectors from limiting their liability, does just that – it is unreasonable and creates an undue burden on home inspectors and the home inspection industry.  

 

Approval of SB 627:

 

•            Would send an erroneous signal to home owners that they do not have to concern themselves with proper disclosure of property conditions. 

 

•            Would send an erroneous signal to homebuyers that a home inspector is liable for any condition they deem a deficiency (causing them to consider a home inspection as a warranty – more than they do now.)

 

•            Would send an erroneous signal to contractors and service people that a home inspector’s money will be available to help homeowners pay for repairs needs, legitimate or otherwise, that will help them secure a job.

 

•            Would likely increase frivolous claims – financially affecting home inspectors, insurance companies, which would result in increased costs to consumers and less consumers availing themselves of the protection of a home inspection.

 

 

•            May cause home inspectors to include additional disclaimers and limitation in inspection reports to address their increased liability, which is counterproductive to consumer protection.  Such additional disclaimers can add confusion to reports, making it more difficult for consumers to understand the key issues identified in the report.  May cause insurance premiums to increase, which would be passed on to consumers, potential making inspection services less available to lower income consumers. (Virginia’s requirements for insurance already provides protection for homebuyers for major errors and omissions). 

 

•            May cause home inspectors to go out of business due to higher premiums or for fear of the extended exposure or because of the cost of a claim settlement or payout, regardless of its legitimacy, resulting in less competition for home inspectors, higher prices for consumers.  It may also affect consumer’s ability to avail themselves of the services of a home inspector due to real estate contract time restraints.

 

Some other points to consider:

 

•            A home inspection is conducted during a limited time period, with the scope of the inspection spelled out in the standards of practice, including accepted limitations and exclusions.

 

•            Home Inspectors are not the manufacturer, builder, installer or serviceperson for any element in a home. They do not verify compliance with building codes or manufacturer installation requirements.  

 

•            Home inspectors cannot/do not conduct invasive or destructive testing.

 

•            Home inspectors do not have access to a home’s past history or service record and may even provide erroneous information about the property. 

 

•            Home inspectors do not have any control over conditions that occur/change between the time of their inspection and title transfer. 

 

•            Home inspectors cannot inspect or assess inaccessible or concealed components or latent conditions.

 

•            It can be weeks or months between the inspection and title transfer.  Lack of owner maintenance, climatic factors and storms can adversely affect conditions.  

 

 

Many courts that have addressed and upheld limits of liability clauses have generally considered the totality of the circumstances related to the services involved and upheld them as long as there is no attempt for a total limitation on liability or one that attempts to limit willful misconduct, fraudulent practices, recklessness or gross negligence. In their rulings, the courts have considered whether the language in a contract is clear; whether a reasonable approach was used to present the contract; and the reasonableness of any limitation.  We understand the need for quality and accountability within the home inspection profession and believe these can be achieved easily by limiting liability to gross negligence, providing simple contract language, providing the contract to homebuyers well before the inspection (via electronic means or otherwise) and having a reasonable dollar limit. 

 

 

While we believe the objective of SB 627 to provide protection to homebuyers is noteworthy, the total prohibition on limiting liability does not do so.  For this and the foregoing reasons, we respectfully request that this bill be tabled, and consideration be given to determining other ways of providing protection for homebuyers for negligent home inspections.

 

 

Respectfully,

Scott Wharton, Richmond, VA, Licensed Home Inspector #3380000621

John Burke, Chesapeake, VA, Licensed Home Inspector # 3380001054

Tim Fisher, Stafford, VA, Licensed Homs Inspector # 3380000750

John Murray, Bristow, VA, Licensed Home Inspector # 3380000859

Darrell Fann, Carrollton, VA, Licensed Home Inspector # 3380000748