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01 Feb 2021

Can a home inspector be found liable for more damages than his inspection fee?

by Admin
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Smith v. Asaff, 2021 NSSC 16

On February 26, 2009, the Plaintiff, Michael Smith hired T.E. Gordon Home Inspections Inc. to conduct a home inspection prior to purchasing a home from co-defendants Ab Mason Asaff and Doreen Asaff. The property inspector provided the Plaintiff with an Inspection Agreement at the property on the date of the inspection. This Inspection Agreement had the following clauses:

T.E. Gordon Home Inspections Inc. agrees to conduct a visual inspection to acquaint the client with the actual condition of the subject property. This inspection is based on all of the exterior and interior areas of the structure that are easily accessible. Areas where no access is available (i.e., Attics or crawlspaces without any means of entry) will be considered uninspected. This inspection and report are not to be construed as a guarantee, warranty or certification as to the value of the property inspected or compliance with past or present government codes or regulations of any kind.

It is agreed that T.E. Gordon Home Inspections Inc. employees or agents assume no liability or responsibility for the cost of repairing or replacing any reported or unreported defects or deficiencies, either current or arising in the future, or for any property damage, consequential damage or bodily injury of any nature. T.E. Gordon Home Inspections Inc. liability shall be limited to a sum equal to the amount of the fee paid for the inspection.

T.E. Gordon Home Inspections Inc conducted a home inspection, identifying no significant issues. The Plaintiff bought the home and 3.5 years later, landscapers excavating a garden bed on the front of the property noticed apparent issues with the exterior of the property. Further investigation revealed significant structural problems. The Plaintiff brought an action against both the old home owners and the home inspector. The home inspector brought a motion under Rule 12 of the Nova Scotia Procedure Rules “determination of a question of law before the rest of the issues in a proceeding are determined”. If successful, the damages payable by the inspector would have been limited to the fee paid for the inspection, which was $425 plus tax.

The court ruled that the exclusion clauses noted above are too ambiguous and must be read against the drafter. The court went on and quoted Brownjohn v. Ramsay, 2003 BCPC 2 2003 in writing “the average consumer of a home inspection services would be very surprised to be told in clear and understandable language that the inspector can be incompetent or reckless, or incompetent and reckless, and express any opinion he likes regarding major structural aspects of the house, and have no responsibility to the client beyond the fee”

The court concluded that the exclusion clauses contained in the Inspection Agreement did not apply and an award against the defendant home inspector could be higher than the fee paid for the home inspection.

You can read Smith v. Asaff, 2021 NSSC 16 in its entirety here.

At Foster & Company, we represent institutions and individuals looking for help understanding insurance coverages and responding to claims. Contact us by phone at 506-462-4000 or reach us online for advice.