Realtors Can Limit Their Liability by Working with The Most Thorough New Jersey Home Inspectors
Realtors are increasingly finding themselves named as defendants in litigation when house purchasers are claiming damages as the result negligence of one or more of the parties in the real estate transaction.
Dissatisfied buyers of properties are operating in an environment that has the potential to point blame at a multitude of professionals. In current lawsuits there are many defendants listed: Realtor, home inspector, sellers realtor, and brokers. In lawsuit after lawsuit one finds multiple defendants: the sellers, the sellers’ agent, the sellers’ agent’s broker, the buyers’ agent, the buyers’ agent’s broker, the home inspector, the termite inspector and so on. Multiple counts: fraud, negligence, breach of contract; and, generally, hundreds of allegations are made against the various defendants.
Most of the existing cases are without basis but that does not prevent your insurance carrier from collecting your deductible, even if you are blameless. Often these types of complaints are all encompassing with large numbers of allegations against the parties.
The best strategy is to avoid being named in the litigation in the first place. There are a number of effective policies that can significantly reduce and even eliminate your exposure to being named in a base less lawsuit.
Most law suits occurring from a residential real estate transaction almost always result from a feeling on the purchasers part that they received much less than they bargained for. Problems accured in the property and now the buyers are seeking remedy in the form of a lawsuit. Often the alleged problems were visible at the time of the home inspection but for were not discovered by the home inspector.
Ways You Can Sharply Reduce Your Professional Liability Exposure:
- Insist that your client hire a thorough New Jersey home inspector to inspect the property. The New Jersey home inspection should also include additional inspections for the existence of wood destroying insects, lead, mold and radon.
- Manage the buyers expectations of what can reasonably be discovered by a visual inspection of a home that is full of furniture, has carpeting and storage that can limit visibility during the home inspection.
- Obtain your own professional liability insurance to protect yourself.
- Avoid conflicts of interest. Never recommend an NJ home inspector who participates in preferred vendor lists. All major inspector associations prohibit such participation.
- You as a realtor have a fiduciary responsibility to refer the very best and most thorough NJ home inspectors. You should never recommend any inspector with whom you have a close personal relationship.
- Only recommend inspectors who adhere to a strict Code of Ethics and Standards of Practice, such as members of InterNACHI and ASHI.
Modified with permission from Nick Gromicko, InterNACHI